Recently, we discussed the first step in the home purchase process: getting pre-qualified. Getting pre-qualified allows you to enter the home buying process prepared, with a budget in mind. Once you’ve been pre-qualified, the second step in the home buying process is to choose your mortgage loan type.

Fixed-Rate vs. Adjustable-Rate
Mortgage loans are split into two types: fixed-rate and adjustable-rate. A fixed-rate mortgage has the same interest rate for the length of the mortgage term. Fixed-rate mortgages are usually available in either 15- or 30-year terms. The 30-year fixed rate mortgage is the most common type of mortgage.

An adjustable-rate mortgage has an interest rate that is usually fixed for a set period of time, and then periodically adjusted according to a specific benchmark. Many factors determine how the interest rate changes, including market conditions, financial index, etc.

Whether you should choose a fixed-rate or adjustable-rate mortgage depends on your personal financial situation, how long you plan to live in your home, how quickly you plan on paying your mortgage back, and many other factors. Your loan originator can help you determine which type will work best for you.

Loan Programs

Once you have chosen the type of rate that is best for you, you can choose a loan program. Some of the most common loan programs are:

For a more comprehensive list of loans and their requirements, contact your mortgage loan originator.

According to Gladys Marcelin, NFM Lending Georgia Branch Manager, the most important factors to take into consideration when choosing a loan program are your credit, your income stability, and your available assets. Your loan originator can work with you to choose the loan program that best suits your needs and financial situation.

In addition to working with a knowledgeable professional, educating yourself on the mortgage process is important, especially as a first-time homebuyer. Gladys recommends attending a homebuyers’ seminar, especially if you are a first-time homebuyer, to learn more about home loans and buying a home.

“Buying a home can be a tedious process, but it can also be rewarding and is a great accomplishment,” says Gladys.

If you have any questions about loan programs or the home buying process, contact us. If you are ready to start the home buying process, click here!