Mortgage Companies Introduce Creative Home Loan Products
By Kelly Richardson
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With the looming threat of a bursting real estate bubble, mortgage companies are coming up with some creative mortgage products to bring in new business. If your financial situation is less than ideal, here are some home loan options that are available to you that will get you into the home of your dreams.
Mortgage companies, in an effort to fight off an eminent recession in home purchasing, have created a new line of mortgage products that cater to virtually every financial situation. The days of the 30-year fixed mortgage have been replaced by a more reflexive, responsive home loan market. Here are some mortgage products that you might not be familiar with but can make a huge difference if you have particular financial difficulties or concerns.
Creative Mortgage Plans
As with any mortgage product or home loan offer, check with several potential mortgage companies for terms, conditions, and details before choosing. An ounce of research will save you both time and money in the long run.
- » 1 Year ARM. A 1 year adjustable rate mortgage features a home loan that changes interest rates each year. This product is ideal for homeowners who want the lowest rates possible and don't mind a year to year change.
- » 3/3 & 3/1 ARMs. These home loans have a fixed interest rate for the first three years followed by a change in rate every three years (or every year) after that. This plan is for homeowners who don't plan on staying longer than three years.
- » 5 Year Balloon. A five year mortgage balloon product has an interest rate that stays steady for five years followed by payment of the mortgage in full. You typically will want to refinance after the first five years to avoid the big payment.
- » 7/1 ARM. Similar to a 3/1, a 7/1 adjustable rate mortgage stays steady for the first seven years and then goes to a yearly rate change. If you want initial stability and can withstand later changes, this home loan may be for you.
- » 30 Due in 5 Mortgage. If you plan on living at your property for at least five years and can handle one payment change, the 30 due in 5 features a steady five year payment with the rates adjusting to the market value after.
About the Author
Kelly Richardson covers the real estate scene in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.