The Basics on Mortgage
Reality will surely tell us that not everyone has enough of money to instantly purchase a house. That is why there is mortgage, so that we can get the house that we want. There are two kinds of mortgages and these are conventional and government loans. These are arranged as fixed rate loans and adjustable rate loans.
The United States government provides mortgage loans which can be located in 3 government departments and these are The Department of Veteran Affairs, Department of Housing and Urban Development and Rural Housing Services. There are mortgage plans that are low or moderate depending on the state.
For the conventional mortgages, there are two kinds under this category and these are the conforming mortgage loan and the non-conforming mortgage loan. When we say conforming, this follows the guidelines and conditions that were set up by two stock-holder owned companies. These are Fannie Mae and Freddie Mac. What they do is they buy mortgage loans from lending companies and then they sell these to investors. They set guidelines on down payments, loan amounts, suitable properties and income requirements on properties.
The non-conforming mortgage loans that are available are jumbo loans and b/c loans. When we talk about jumbo loans, these are mortgages that are above the maximum loan that was laid down by Fannie Mae and Freddie Mac. These have high interest rates because these loans are acquired and bought at a lower value. B/c loans are for people have already borrowed mortgage before but they filed for bankruptcy and foreclosure. They are also the borrowers who have late payments.
As mentioned, these mortgages are classified as fixed rate loans or adjustable rate loans. Fixed rate loans are those whose monthly payments remain the same over a certain period. With Adjustable rate loans, monthly payments will change periodically depending on the changing interest rates.
The internet is a good source of information when you want to learn about mortgage. There are so many companies that offer online resources. Before choosing and deciding on a loan, make sure that you read on everything. Being knowledgeable about these things will pay off in the long run.