Illinois Mortgage Broker

3 Types of Mortgages to Know

As a homeowner, being able to take a mortgage loan can initially seem like a daunting process.  Aside from the legalities associated with it, there are many options to choose from.  Some of the most common types of mortgage options range from Adjustable Rate Mortgage (AMR), Federal Housing Administration Loan (FHA), or the Veterans Administration Loan (VA).  It’s crucial to understand and know the variety of options one may be accessible to accessing when exploring the idea of applying for a mortgage loan.  Options like Balloon, Bi-Weekly, and Assumable mortgages may not be the most common but incorporate different factors that some may benefit from depending on their needs when applying.

Balloon Mortgage 

A Balloon Mortgage are for applicants who anticipate a short length of time that the property will be under their name or for business use such as a construction development project.  In comparison to most other mortgage options that can span across 2-3 decades to complete the full settlement, a Balloon Mortgage offers lower monthly installments that allow for quicker resolution clearance.

Bi-Weekly Mortgage

A Bi-Weekly Mortgage is another viable option for an applicant who is interested in reoccurring payments with a faster turnaround time in comparison to larger annual payments.  This allows for the increased equity as well.  Additionally, this option offers the lowering of the borrower’s comprehensive interest value.

Assumable Mortgage

An Assumable Mortgage allows the new homebuyer to acquire all mortgage costs associated with the property from the buyer.  This can include interest rates, principal balance, repayment period, and any additional pledged terms.  Opting into this recourse allows the removal of applying for a new mortgage which is known to be a meticulous procedure.

      As important as it is to understand all mortgage options, the significance of each pros and cons can weigh on what choice is best for you.  Research is key when entering into this process to ensure that the buyer is selecting the best option for their contracted deal.