Exploring Options For Mortgage Financing And Housing

Mortgage finance and housing is a term most people come across at some point in their lives. Everyone needs a home to live in. There are several kinds of mortgages available to finance your housing requirements. Below is a list of some of the mortgages available. Adjustable Rate Mortgage As the name suggests, these are mortgages through which it is possible to change the rate of interest during the course of the loan period. The normal duration of mortgage finance and housing loans is 25 to 30 years.

However this may vary depending upon the lender. The interest doesn't change for a predetermined period in the beginning. This period ranges from 1 year to 10 years. When this period is over, change in the rates take place according to the agreement between the lender and borrower. The 2 percent swing, that was normal in the past, has been replaced by the 5 percent change recently.

This option is good if you plan for a short duration and can move before the fluctuation in interest starts. Balloon Mortgage Another option for mortgage finance and housing requirements is a balloon mortgage. With this type of mortgage you don't have to pay the total borrowed amount even when the term of the loan is over.

The amount left with the borrower differs from lender to lender. An interest only balloon mortgage is also possible. If you choose it, you need to pay only the interest every month and the original amount borrowed at the end. Bi-Weekly Mortgages Everybody is looking for ways to save interest on mortgage finance and housing.

Bi-weekly mortgages save a significant amount of interest, because you pay half of the installment every two weeks. This increases the number of payments to 26 instead of 24. At first sight, it does not look impressive, but the results are rewarding.

A bi-weekly mortgage at a 4.5 percent interest rate for a 30-year period can be paid back in 24 years and six months and you save a huge 28 percent. Bridge Loans If you have built in equity from your old house and plan to buy a new one, then you can choose this option to meet the requirement of a down payment.

When you sell the old house, you repay the loan. Construction Mortgages This loan is ideal if you are constructing the new house. When you complete the construction work, convert it in to a conventional mortgage.

However, you need to pay a higher rate of interest. Additional Help You may seek professional help available online regarding your mortgage financing. There are experts in the field and software, which can make the process of purchasing property easier.

David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site

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