Fixed Interest Rate Mortgage

If you are looking into taking out a fixed interest rate mortgage to help pay for your first home purchase, you will probably want to first ascertain which mortgage option is best for you before deciding if you want a fixed or variable interest rate.  This is because there are many different mortgage factors that can come into play depending on the criteria that you meet when you walk into a lender's office.  Knowing about the different kinds of mortgage options you have open can help you make a better choice about which way to proceed with your first home purchase.

If this is your first home purchase, but you do not have excellent credit, you may find that you need to take advantage of FHA mortgage lenders to help guarantee your loan.  While the FHA mortgage lenders do not actually loan you the money to take the loan, they will back you therefore making it possible to attain a loan even if you do not have excellent credit at a rate you can afford.  The other advantage is that you can make a very low down payment of 3% and sometimes even zero if you take advantage of the program the federal government offers you.

For those who are self-employed or do not want to document their assets or income there can be additional difficulties in obtaining a mortgage.  There is usually one of two options available to these people, a stated income mortgage or a no doc mortgage.  For a no doc mortgage you will need excellent credit since this is the only area that you are being rated on and will have to pay a higher interest along with a large down payment.  The other option is a stated income mortgage where you can verify the source of your income, but not your actual income which usually results in higher interest than a typical mortgage, but lower than a no doc mortgage with a smaller down payment required.

For those who are thinking about buying a luxury purchase, you will have to account for high jumbo mortgage rates because your purchase will be harder to make up the money on if you default and thus you are a higher perceived risk to the lenders.  Thus, if you are considering a luxury purchase (generally over $400,000 in the continental US) you will be subject to a 5% higher down payment beyond the normal lender's standards that you qualify for and a higher interest rate.

Finally, if you are looking into refinancing your home or taking out a second mortgage to help get ahead on your bills or make a large purchase and are over the age of 62 you may want to consider utilizing reverse mortgage rates instead.  This type of mortgage will allow you to borrow against the equity of your home but does not require you to make any monthly payments meaning you will never face foreclosure.  Instead, once you leave your home you will have to repay the loan from the sale of your house.