Residential Mortgage

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“Weigh Your Options”

Fixed rate and adjustable rate mortgages are the two main types of mortgages, but there is a wide variety of other mortgage products available.

Before we introduce to the various types of mortgage services offered by Penington Consulting Group, below are pros and cons of just a few of the mortgage products you may want to consider

Pros and Cons

Type of Mortgage

  • Fixed-rate mortgage


  • Adjustable-rate (ARM) or variable-rate mortgage


  • FHA (Federal Housing Administration) loan

  • VA loan



  • Balloon mortgage



  • Interest-only



  • Reverse mortgage




Pros

  • No surprises The interest rate stays the same over the entire term, usually 15, 20 or 30 years.
  • Usually offers a lower initial rate of interest than fixed-rate loans.


  • Allows buyers who may not qualify for a home loan to obtain one Low down payment.
  • Guaranteed loans for eligible veterans, active duty personnel and surviving spouses Offers competitive rates, low or no down payments.
  • Usually a fixed rate loan with relatively low payments for a fixed period.

  • Borrower pays only the interest on the loan, in monthly payments, for a fixed term.

  • Allows seniors to convert equity in their homes to cash; you don't have to pay back the loan and interest as long as you live in the house.

Cons

  • If interest rates fall, you could be stuck paying a higher rate.

  • After an initial period, rates fluctuate over the life of the loan When interest rates rise, generally so do your loan payments.
  • The size of your loan may be limited.


  • The size of your loan may be limited.



  • After an initial period, the entire balance of the loan is due immediately This type of loan may be risky for some borrowers.
  • After an initial period, the balance of the loan is due. This could mean much higher payments, paying a lump sum or refinancing.
  • Subject to aggressive lending practices and false advertising promises, particularly by lenders that prey on seniors. Check to make sure the loan is Federally insured.y

Mortgage Types

As mentioned above, there are two categories of mortgages: the fixed-rate and the adjustable-rate mortgage (ARM). Within these categories, there are some variations. However, in nearly all mortgages two factors are usually at odds: how predictable the payments are and how low, or affordable, they are at least initially. In addition there is the reverse mortgage, a special loan product that enables homeowners over the age of 62 to convert a portion of their home equity into monthly tax free income. Pennington Consulting Group will walk you through making the right decision and understand the decision since most cases it is the largest financial purchase you will make in you file.

*Click on each tab below to learn more about the mortgage.

The 30-year fixed-rate mortgage
The 15-Year Fixed-Rate Mortgage
The Adjustable Rate Mortgage (ARM)
Mortgages allowing interest-only payments
Loans with pre-payment penalties
Reverse mortgage
Buydown Mortgage

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