Realtor en Virginia - Virginia Real estate Agent - Realtor - Maryland - D.C

A mortgage is a lien on a property that has to be paid over a specified period of time.
It is the guarantee that you will repay the money you have borrowed from the lender to buy your home.
There are diferent types of loans, each with its own advantages and disadvantages, the best way to figurate out what the best mortgage is would depend on some facts, like how long do you expect to live in that property and if you expect your salary to changed over the time you live in that property.

These are usually amortized over 15, 20 or 30 years. The rate on this loan will never go higher or drop regardless of inflation.
Generally this loan is offer at a higher interest rate than the Arm loans ,balloon and equity lines. For this reason your purchasing power can be limited by your income.
You should choose this type of loan if you are considering to stay for a long period of time in a home or if you thing that your wages will not vary over the years.

Adjustable-rate mortgages ARMs are popular because they usually start with a lower interest rate and a lower monthly payment. The lower rate may also allow a higher loan amount. However, the interest rate can change during the life of the loan, which means that your monthly payment would increase (or decrease).

There are several types of ARMs, such as the 10/1, 7/1, 5/1 and 3/1. The first number (7 for example) is the length of the initial period, during which the interest rate can't change. The second number (1 for example) is how often the ARM is adjusted after the initial period. So, a 7/1 ARM won't change for the first 7 years, but can change in the 8th year and again every year after that. Depending on the initial cap the change could be as high as 5 percentage points above what it was before.

Balloon loans have monthly mortgage payments based on a 15 or 30-year amortization schedule, and you have a choice at the end of the 5, 7, 15-year term to either pay off the remaining balance or refinance the mortgage. So you have the advantage of a low monthly payment, like someone with a 30-year loan, but you must pay off the loan at the end of the specified term.
Generally at the end of the term there is a remaining balance higher than the average payment, because the payments have been amortized over 15 0or 30 years.

This loan should be chosen only if you want to keep your property for less than the loan term or if you will refinance before the 15 or 30 years.