Purchasing a new home is an exciting task for some however when it comes to figuring out finances things can start being challenging. Deciding on a lender and a mortgage is not a difficult task once you are aware of the financial terminology. If you can learn how to ride a bicycle with someone's instructions then you should be able to figure out which mortgage will work best for you. Typically, most sellers require the buyer to attach a pre-approval letter from their lender with the offer, but it is not mandatory. If you went through the pre-approval process then you might have a slight idea about what type of mortgage you will get? Below I will list different kinds of mortgages available for a typical homebuyer or investor.
Fixed rate and Adjustable rate mortgages (a.k.a ARM) exist to help consumers choose the interest rate they want to pay over the years. Fixed rate mortgages are commonly used by first-time homeowners however & I recommend them as well. Be careful if you decide to get an ARM, do the research before signing anything.
Fixed rate mortgage allows you to keep your interest rate locked in for the entire life of the note. Statistics have proven that rates have only gone up while comparing over a period of 10 years, not down. There is a detailed blog post for those who need a full step by step guide to buying a home. I encourage you to speak with a Realtor & Lender representative in your area to understand more about the process & terms instead of "googling" everything!