Author: Ryann Cairns
A flexible mortgage can be a big help to the first time home shopper who never thought he or she would be able to afford a home of their own. There is no doubt that the housing market is hot right now, and many people are giving up their flats and moving on to a home of their own.
Home ownership is a great thing to strive for, and today’s flexible mortgages make it possible for many people who would not have qualified for a mortgage loan a few years ago to get finally get into a home of their own. Flexible mortgages can refer to many non-traditional mortgages. These non-traditional mortgages can include interest only mortgage loans, balloon payment mortgage loans, as well as mortgages for longer periods of time and mortgages with extremely low introductory interest rates.
The term flexible mortgage can also be used to describe various variable rate, adjustable rate and fixed rate mortgages. Your banker or mortgage broker can give you further insight into theses various terms and the mortgages they represent. Before considering one of these flexible mortgages, it is important to understand all the terms and conditions before you sign on the dotted line.
Be especially cognizant of any balloon payments that may be contained in the home mortgage loan. Be aware of things like when the balloon payment is due and how long you have to pay it. After all, you do not want to pay on your mortgage for years or even decades, only to lose your home when you cannot make the balloon payment at the end.
Likewise, it is important to determine the maximum possible interest rate on any variable rate mortgage loan, particularly one that includes a low introductory, or teaser rate. After the short initial time period during which the interest rate is artificially low, the interest rate will rise to market, or even above market, rates. Be sure you know not only what the initial monthly mortgage payment will be, but what it will rise to when the initial teaser period expires.
As with any mortgage, shopping around is the key when looking at a flexible mortgage. Shopping around can save you lots of money over the life of the mortgage loan.