There are many Seattle mortgage loan plans to choose from. There are fixed rate mortgages, adjustable rate mortgages, second mortgages, and reverse mortgages. Before choosing any mortgage loan plan, you should always keep in mind the amount of the down payment you can afford to pay out. There are more loan options available if you can pay about 20 percent on your down payment. Although there are mortgage options available even if you do not have the full 20 percent to pay down on your mortgage loan.
A fixed rate mortgage loan is a loan plan in which the interest remains fixed throughout the tenure of the signed loan agreement, and is available for 10, 15, 20 or thirty year mortgage plans. The main advantage of a fixed rate mortgage is that it protects you from economical depressions and interest rate fluctuations. The rate of interest remains fixed so you don't have to think about paying more than you have planned. However it has one disadvantage, as you will not be able to take advantage of the situation if the interest rates substantially fall down. It is also not suitable for repeat home buyers and investors who generally tend to flip properties. For these types of buyers adjustable rate mortgages and hybrid adjustable rate mortgages are perfect.
Generally you have to pay a higher rate of interest for a long term loan. The current rate for a 30 year mortgage is just over 6 percent. However those who are looking for a 20 year mortgage loan, you will find that the interest rates are very similar to the 15 year loan term. Although your monthly mortgage payments may be higher on the shorter term loans, in the long run you may save thousands on what you are paying out in interest.
If you are buying real estate for business purposes then you can apply for a fixed rate commercial mortgage which generally ranges from five to twenty years in term length. Large industries with a proper business plan can apply for a fixed rate super jumbo loan.
If a fixed mortgage loan is not your cup of tea then you can choose an adjustable rate mortgage. They generally have a period of 30 years. The basic advantage of the adjustable rate Seattle mortgage plan is that the rate of interest is not fixed and goes up and down with the current economic scenario of the country. They are less expensive than the fixed rate mortgages as the lenders provide teaser rates to the party. However, adjustable rate mortgage loans are not suitable if the current economical condition points towards an increase in mortgage loan interest rates.
If you fail to get the loan amount required to purchase your property, you may apply for a Seattle second mortgage option. Many people in the last year have applied successfully to buy a Seattle home with the help of a second mortgage. However there are certain things to consider. If the market rates are lower than your first mortgage rate, then it will be better to refinance your mortgage, but if it is higher then its better to go for the second mortgage option.
The rates of the adjustable mortgage plan also remain generally lower. Where as the 30 year fixed mortgage rate is 6.44 % and 15 year fixed mortgage scheme is 5.96 % the 5 year ARM is 5.90%. You can also take advantage of the fixed rate reverse mortgage loan. They are also available in fixed and adjustable interest rates.
You can also take advantage of the balloon payment. It is particularly helpful if you don't have enough cash and want the interest rates to remain low. It becomes 100 percent due after a specified time has elapsed. You have to pay off the loan in cash or refinance when it matures. It is suitable for you if you do not want to hold on to the property for a long time and can easily sell it off at the time when the loan matures to pay off the amount.
Before applying for any loan check out the background necessities and choose your home loan plan wisely. There are numerous options and the rates change every day, as well as the loan options that are available.
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