There are various types of mortgage loans with differing mortgage interest rates being offered by banks and other institutions to home owners. However, obtaining an affordable mortgage rate means first knowing about all of the options out there. Choosing the kind of mortgage loan that is most appropriate for your situation can greatly cut down on the amount of time you spend searching.
Flagstaff Banking Rates has compiled a list of a few different mortgage loan types. Consider if one may provide you with more favorable loan terms before committing to a mortgage rate on your next home purchase in Flagstaff.
Fixed Rate: A fixed-rate mortgage loan means the interest rate never changes, even if the economy takes a downturn. Your mortgage payment remains the same throughout the entire term of your loan.
ARM: An adjustable rate mortgage means your mortgage interest rate rises and falls with average interest rates set by a defined index. The benefit of securing an adjustable rate mortgage is that you will most likely pay less over time.
Interest Only Loans: The term “interest only” means the borrower only makes payments on the principal balance’s interest for a set amount of time. After this initial period, the loan is amortized for the remainder of the term.
Reverse Annuity Loans: These mortgage loans are designed to benefit older homeowners, especially retirees on a fixed income, by tapping into the value of their home. A lender offers a loan based on a percentage of the home’s value and pays the borrower a monthly annuity.
FHA Loans: The Federal Housing Administration offers various home loan programs. They often require lower down payments and are easier to qualify for than traditional mortgage loans.
VA Loans: The mortgage loans are made available to veterans through the U.S. Department of Veteran Affairs. They offer attractive loan terms, often with no down payment required.