Three Mortgage Financing Options, by Clyde Brown, Fremont, Pleasanton, San Jose Real Estate Expert

A mortgage is a type of loan that uses property as security until the loan amount is repaid.  There are different types of mortgages available to buyers seeking financing in the Fremont, Pleasanton, San Jose area.  The three most common mortgage options are fixed rate mortgages, adjustable rate mortgages, and graduated payment mortgages.  Each option has different benefits; the buyer should consider all options before committing to a specific loan.  Real estate agents and brokers know the mortgage options from the perspective of the homebuyer.  This knowledge is only one benefit of hiring a professional to help you with your home buying process.

Fixed rate mortgages require the borrower to pay back the loan and interest in equal payments over a specific amount of time.  The most common are 30 year, and 15 year fixed rate mortgages.  As the name implies, fixed rate mortgages have an interest rate that remains constant throughout the term of the loan.  An advantage of this type of mortgage is the stability of the repayment structure.  A disadvantage of this type of mortgage is if interest rates go lower, the homeowner would have to refinance in order to take advantage of lower interest rates.

Adjustable rate mortgages are also known as "ARMs."  There are many types of adjustable rate mortgages.  The repayment terms such as interest rate and years to pay back the loan vary.  However, common feature of ARMs include interest rates that change depending on specific variables.  They have what is known as a "cap" which limits the maximum amount the interest rate can raise over the course of the mortgage.

Graduated payment mortgages can be conventional, VA, or FHA.  Graduated mortgages are similar to the fixed rate mortgage.  Where they differ is with the monthly payment.  During the first few years of repayment, the payments are lower.  After a pre-determined amount of time the monthly payments rise.  It is common for them to rise slightly each year for the first five years, and then remain constant for the rest of the loan.  This type of mortgage is good for people who expect to have a substantial increase in income after a few years.  An example of this situation is if one spouse is in school at the time of the home purchase, but will graduate and add to the household income in a few years.

For more information about financing and mortgages in the Fremont, Pleasanton, San Jose area contact Clyde Brown of Legacy Real Estate & Associates at 510-371-4237 or email at Clyde@ClydeBrownHomes.com.
There is a lot of free information available to you about buying, selling, investing, or relocating in the Fremont real estate market. If you are considering buying or selling property, planning to relocate, looking for East Bay Area homes for sale, or looking for any other information about real estate in the East Bay, or the surrounding areas, please visit the most complete website dedicated to everything real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and experienced Bay Area Realtor, or have real estate or mortgage related questions, please feel free to contact me I will be more than glad to answer your questions. Call me at 800-839-0665 or email me at Clyde@ClydeBrownHomes.com. For all your East Bay cities needs including Fremont, Newark, Union City, Hayward, Oakland, Santa Clara, Milpitas, Dublin, Livermore, Pleasanton, and San Ramon. Clyde Brown Legacy Real Estate & Associates.

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