If you’re buying a home for the first time or refinancing your mortgage loan then chances are you’ve already realized that there are many different types of loans out there. At InterLinc, there is no one-size-fits-all package. We know that every borrower’s situation is unique, so we handle each loan application on a case-by-case basis to find you the highest quality loan and lowest possible rate. We’re a family at InterLinc and so we treat you like family, which is why we’ll provide you with options to give you confidence and flexibility for your financial future.
To help you, here are a few of the most common types of loans for residential properties:
Purchase Loans – used to finance the purchase of a home. Whether you are buying a single-family home, townhouse or condo, if you are not paying cash, you’ll need a purchase loan.
Refinance Loans – used to replace the current financing of a residential property. Borrowers frequently consider refinancing a loan to convert some of the equity built up in their home into cash, reduce their mortgage rate, change the type of financing (such as moving from an Adjustable Rate Mortgage to a Fixed Rate loan) or reduce the length or term of their loan.
Fixed-Rate Mortgages (FRMs) – mortgages that have a set or “fixed” interest rate that does not change during the life of the loan. Because the rate will not go up or down, the combined principal and interest (P&I) payment is consistent for the life of the loan. For borrowers who want a stable payment and expect to remain in their home for at least three to five years, a fixed-rate loan may be the best option.
Fixed-rate loans generally have a loan term or length of 10, 15, 20 or even 30 years. A loan with a shorter term will usually have a lower interest rate, but the payment will be higher since the loan amount is paid back over a shorter period of time. If you think you may want to pay off your loan earlier, but don’t want to commit to a higher monthly payment, consider a 20- or 30-year loan term; you can always pay extra principle to pay off the loan faster.