West Palm Beach Bankruptcy Lawyers

Different Types of Mortgages

When purchasing a home, the range of financing options can be very overwhelming. You want to choose the right mortgage for your budget and lifestyle, and you want the lowest interest rate you can get. Here is some information on all the different types of mortgages there are to choose from.

Fixed Rate Mortgage (FRM)

A traditional fixed rate mortgage is the most commonly used mortgage, chosen in roughly 70 percent of home purchase transactions. This mortgage loan has a set interest rate that remains the same throughout the entire term of the loan, despite any changes in the prevailing market rate. A fixed rate mortgage lets the customer rely on a stable monthly payment.

Adjustable Rate Mortgage (ARM)

Adjustable rate mortgages have become increasingly popular in the real estate market. These mortgages have interest rates tied to an index that changes with the prevailing market rates. So, if the prevailing market interest rates decrease, so will the consumer’s monthly payment, and vice versa. Specific intervals at which the payment may change are indicated in the loan agreement.

Government Guaranteed Mortgage Loans

There are several different kinds of mortgages offered through government programs. The Federal Housing Administration offers a fixed rate mortgage loan designed for first-time home buyers of moderate to low income.

The Veteran’s Administration offers a government guaranteed mortgage that can be obtained with little or no down payment. The U.S. Department of Agriculture offers a rural development guaranteed housing loan that does not require a down payment or mortgage insurance.

Contact Us Today

If you would like more information about mortgages or bankruptcy, contact the West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, P.A. today at 561-353-2600.