The Variety of Real Estate Loans
There are a wide variety of mortgages available to people looking for a San Diego area real estate loan. Here is a list of the most common:
- Adjustable Rate Mortgage (ARM): This is an adjustable rate loan in which the interest rate and monthly payment are adjusted throughout the life of the loan at various intervals.
- Reverse Mortgage: Provides income from equity in a home. This is normally used by senior citizens.
- Home Equity Loans: This kind of loan borrows against the equity you have built in your home.
- Amortized Loan: With this type of loan you make regular payments that are applied to both your interest and the principle balance of the loan. At first the majority of each payment is applied to interest and over the duration of the loan shift to a larger portion of the monthly payment being applied to the principal.
- Hybrid Mortgage: Hybrid mortgages are ARMs that can later be converted to fixed rate loans. In some cases a loan can start as a fixed loan and become an ARM.
- The Term Loan: With a term loan, the principle is paid down with a schedule and the interest for each fiscal year is paid in one lump sum at the end of the year.
- Interest-Only Loan: With an interest only loan, for a fixed period of time there is no payment required on the principal of the loan and only interest payments are made.
- Balloon Mortgages: With this type of loan payments are scheduled that will not pay the loan in full over the loan period and a final “Balloon” payment is required at the end to pay the balance.
- Budget Loan: A budget loan can have standard housing costs rolled into it.
- Purchase Money Loan: With this type of loan the seller finances the homes purchase.
- Graduated Payment Mortgage: Graduated loans start off with lower payments that gradually increase over time.
- Shared Appreciation Mortgage: Share a percentage of your homes future appreciated value with your lender and get a lower interest rate.
