Historically, mortgage loans came in a nice, tidy fixed box. The standard bearer was the 30 year fixed interest rate mortgage. If you wanted a bit of flexibility, you could go with an adjustable 30 year mortgage loan. There were more than a few problems with either of these products. First, you had to qualify for the and even slightly bad credit could keep you from doing so. Second, the loans took 30 YEARS to pay back! Third, and most importantly, these mortgage loans were not particularly flexible and rarely took into account the financial situation of most borrowers. Alas, the game has changed considerably over the years. The current list of mortgage loans available to borrowers is so extensive, it is nearly impossible to list them. There are mixed loans incorporating initial adjustable rates that convert to fixed rates after a set period of time. There are mortgage loans that are interest only, meaning you don't pay the principle and pray your home appreciates over the year. There are balloon loans, bridge loans, bad credit loans and so much more. In fact, new loan products seem to come onto the market each month. Simply put, this is not your father's real estate market anymore. |
