Undoubtedly, the process of finding the right type of mortgage can be a difficult one. With many factors, such as interest rate, down payments, and value impeding with the process, it can be easy to choose a mortgage that just simply isn’t a good fit. In order to avoid problems faced by hundreds of thousands of Americans, follow the tips below to find your perfect match.

Mortgages are used to help hopeful homeowners in buying a house, whether it is their first or their fifth. Few individuals have enough liquid funds in to enable them to purchase a property, so mortgages can be a helpful tool. The word “mortgage” actually came from a Law French term meaning “dead pledge”, meaning that the “pledge” dies when either the obligation is upheld or the property is taken through foreclosure. There are two main categories of mortgages: a fixed-rate mortgage (FRM), and adjustable-rate mortgage (ARM). A fixed-rate mortgage has an interest rate that remains fixed for the term of the load. Typically, these loans are for thirty years. Adjustable-rate mortgages have an interest rate that is fixed for a period of time, after which it will then periodically adjust up or down to match the market index. This type of loan is used with fixed rate funding is difficult to obtain or needlessly expensive. Risk is transferred to the owner, so the interest may be 0.5% to 2% lower than with a fixed-rate mortgage.

So what kind of mortgage is right for you? It really depends on your career status and life goals. For example, those planning on buying a house for the long haul, such as for the rest of their life, should go with a 30-year fixed rate. This type of mortgage doesn’t involve changing interest rates, and is therefore the safest. For those planning on refinancing 15-20 years before retiring, a 15- or 20-year fixed or adjustable rate mortgage is the best option. A recent graduate with strong potential for increased earnings could do best with a one-year adjustable-rate mortgage.  A typical family who is planning on living in a home for 4-5 years should explore options with a 5/25 hybrid loan. For those with a good income that tends to be inconsistent month-to-month, an option adjustable-rate mortgage may be best. Lastly, for someone who has relocated and has a good income and saving, an interest-only mortgage could be a interesting comparison.

We at Mortgage Perspectives understand that the hunt for the perfect mortgage plan can be a difficult, complex process. Our team of dedicated Florida mortgage professionals can help you find and actually afford your dream home. Please call us today at 407.733.6425.

Stephen Thaggard, NMLS 356309,  Sr Loan Officer, licensed in Florida,

Embrace Home Loans, NMLS 2184,  485 N Keller Road, Suite 550, Maitland, FL 32751