What Kind of Mortgage Should I Choose?

mortgageTaking out a mortgage is a serious commitment, and choosing the right one for your financial situation could be the key to a happy future. If you have found the home you want and have the finances to start making payments on it, ask yourself these questions when considering a mortgage.

What Kind of Mortgage Lender Should You Choose?

  • Mortgage broker: A mortgage broker networks with multiple mortgage lenders to find you the most convenient price and terms. The broker will often get a price that is better than if you went to the lender on your own, but will also charge you a fee.
  • Wholesale lenders: These are banks or other financial entities that have the money to give out, but have a retailer interact directly with the customers to complete the deal.
  • Portfolio lenders: This type of mortgage lender has their own money and can set their own terms for lending. These loans favor people with unique financial situations, like people with strong finances but some blotches on their credit history.

What Kind of Mortgage Will Work Best for You?

  • Fixed rate: This type of loan has a fixed interest rate to be paid off over a specific amount of time. It offers stability in having the same rate, and is preferred by people who aren’t planning on moving in the near future.
  • Adjustable rate: These mortgages have interest rates that can fluctuate, but are capped to save you from extreme changes. The appeal of these is getting a lower interest rate initially when compared to fixed rate mortgages.
  • Conventional: Any loan that is not backed by the federal government. These are going to be preferred for people with good credit and income, who will likely not qualify for government-backed loans.
  • Government-backed: The government supports certain mortgages with no down payment for veterans and people with low to medium incomes who are looking to buy or renovate homes in rural and some suburban areas. Specific conditions need to be met for government backed loans.

There are a lot of factors when choosing which mortgage is right for you. There are also a number of predatory lending practices to watch out for when choosing a mortgage. Consulting a New Jersey real estate attorney can help you make sure you get the right mortgage and that your lenders are treating you justly.


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