While you plan to buy a new home, you may not be able to decide which type of loan should you apply for? For buying a home you will need to avail services of Home Mortgage Mounds View MN banks offer. In this type of loan, you will keep your home as security for the amount taken by you until you repay the loan. Here also there are a lot of choices among which you can choose a home mortgage that meets your needs the most. You can avail between conventional home loans and government home loans.
Conventional Home Loans
This type of Home Mortgage Mounds View MN wide is provided by mortgage companies, banks and lenders. The interest rate on such loans depends upon the current market trends. Following are different types of conventional home loans
· Fixed rate mortgage
As already mentioned in the name, the rate of interest of this type of loan does not change. After the loan amount is decided, the interest is calculated and divided into equal monthly installments. It remains fixed throughout for a predetermined period, and the change in the market rate does not affect it. This type of Home Mortgage Mounds View loan is available for any period between 10 to 40 years. Those who are taking loan for the first time, this type of loan is the best. Sometimes, when market rate is high, if you sign such a contract, you may suffer a loss. However, it gives better stability and is less risky.
· Adjustable-rate Mortgage
In the beginning, you will get a fixed rate of interest, however with time it will change with the market rate. Generally, it starts with a low rate of interest. However, in this type of loan, the rate of interest may change keeping pace with the current market trend and thus it may be a disadvantage for many. However, if you are looking for any short term deal, this can be a good option. Check out Equity Source Mortgage
· Balloon Loan
While looking for home mortgage in Mounds View MN, you can look for this type of loan too. It is offered at a fixed interest rate on a short term basis usually for a period between 7 to 10 years. After the period is completed you can pay back the loan in lump sum. They are based on amortization schedule for a period of 30 years. This is good for those who have poor credit rating; they get a chance to correct their credit ratings as well. However, paying back in lump sum is an issue and thus, you will be left with two options, either pay back the whole amount or qualify for another loan!
Government Home Loans
While looking for home mortgage Mounds View MN banks offer, you can also consider government home loans as well. These are guaranteed insured loans that are sponsored by government but channelized by any private concern.
Generally, this type of loans can be availed by government employees while they want to buy their home. The interest rate on suchhome mortgage Mounds View MN banks offer is lower than any other conventional home loan.
While buying your home, availing a loan is important. Thus, choose carefully among the different types of loans available to ensure that you repay it back properly and stay in your home happily. For more details, just visit http://equitysourcemortgage.com/home-mortgages-and-loans-in-mounds-view-mn