First Time Home Buyer Loans

QWhat Types Of Loans Are Available And What Are The Advantages Of Each?
AFixed Rate Mortgages - Payments remain the same for the the life of the loan Types of Fixed Rate Mortgages: 1. 15-year home loan 2. 30-year home loan Advantages of Fixed Rate Mortgages: 1. Predictable 2. Housing cost remains unaffected by interest rate changes and inflation. Adjustable Rate Mortgages (ARMS) - Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits Types of Adjustable Rate Mortgages: 1. Balloon Mortgage- Offers very low rates for an Initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically) 2. Two-Step Mortgage- Interest rate adjusts only once and remains the same for the life of the loan 3. ARMS linked to a specific index or margin Advantages of Adjustable Rate Mortgages: 1. Generally offer lower initial interest rates 2. Monthly payments can be lower 3. May allow borrower to qualify for a larger loan amount