A mortgage is one of the most important deals you will enter in your life. No wonder there are various mortgage deals from both private and government-backed agencies. One of the most popular ones is from the Federal Housing Authority (FHA).
Below are some of the most common types of FHA loans in St. Louis. See which loan type will suit your financial standing and needs.
Conventional fixed rate
As the name suggests, this is one of the most common types of loan where the borrower pays a fixed amount for the whole duration of the loan.
Conventional adjustable rate
Like the fixed rate, adjustable rates are also payable for a certain period. The only difference is various fluctuations in the market determine the rate of payment. This means the amount you pay every month varies. A fixed amount is paid on the first three to five years of the mortgage.
A hybrid mortgage is pretty much like a conventional adjustable. The difference is that instead of having a fixed rate for three to five years, borrowers who have hybrid mortgages have a 10-year fixed period.
Blowing air into the balloon will make it expand larger and larger. Balloon mortgage payments are also the same. Borrowers initially pay small payments at the beginning of the mortgage and increase the amount, or pay the totality of it in the future. This mortgage type is best for people who are certain that they will have a huge amount of money to come.
If your existing home is for sale, and you are looking for a new one to move at while it is on the market, then relocation mortgages are the right type for you.
Understanding the different types of mortgage can help you better choose the right mortgage type to avail.