Mortgage Loan Information

My firm handles real estate transactions regularly and clients often have questions concerning different kinds of mortgages. There are a few different types of mortgage loans currently being offered and each has it's unique benefits and drawbacks. Only you can decide what is right for your new home.

One of the most common types of mortgage is typically called a fixed rate mortgage. If you choose this type of mortgage, you will be charged a constant rate of interest for the entirety of the mortgage. Although the idea of a constant mortgage payment can be a comforting one, you should keep in mind these types of mortgage are usually associated with higher interest rates as a penalty for such security.

Another type of mortgage is typically known as a variable or adjustable rate mortgage. With an adjustable rate mortgage, your interest rate and payment will be the same for a specified period of time, perhaps five or six years, before fluctuating depending on the market rates. While this type of mortgage is considered more risky a fixed rate, it is important to keep in mind that there is a ceiling on your payment and that these types of loans often start with lower interest rates. Adjusted or variable rate mortgages can be ideal for people who are just starting out but anticipate steady increases in their salaries. 


It is important to do your research before you decide to take on a loan the size of a mortgage. Before you do so, remember that an attorney can often times be useful in providing unbiased and accurate legal guidance. If you have any questions or concerns, you should consult a legal professional first.

The Facts on Reverse Mortgages

If you or your spouse recently turned 62 or older and own your home, you may be reciving offers from lenders about obtaining a Reverse Mortgage. A Reverse Mortgage is aptly named - it is the exact opposite of a traditional mortgage.

In a traditional mortgage, a lender offers you a loan in order for you to obtain your house and you, in turn, agree to pay that loan down in manageable monthly increments. Since the lender is putting himself as risk by allowing you to borrow such a large sum of money, interest is added on to every month's payment. When you pay your mortgage for the month, you are paying down on your mortgage loan and essentially becoming a step closer to owning your home.

In a reverse mortgage, you already own your home but are older, retired, and would like extra funds each month. When you enter a reverse mortgage, your lender will send you monthly checks. These funds are being taken out of the equity of the house, so the amount of you owe will grow over time. Interest will also be charged to the total balance of your loan. Additionally, most reverse mortgages have variable rates instead of fixed, which means the rate of interest you will be charged will change depending on market conditions. As with any mortgage, a reverse mortgage is a major financial agreement that should not be entered into without careful examination of all contracts and financial documents by an attorney.