Traditional Mortgages: Understanding Your Options
Many lenders now offer specialty mortgages that help make homeownership more affordable but have risks that consumers should fully consider (see our brochure on specialty mortgages - item 126-105). But for most consumers, the traditional fixed-rate mortgage and adjustable-rate mortgage (ARM) continue to be excellent options. However, even these traditional financing options require a number of important decisions by the consumer. "Should I get a 15- or 30-year loan?" "Should I get a fixed-rate mortgage to lock in today’s interest rates for the term of the loan—or is taking out an adjustable-rate loan with a lower current rate and payment, but with the risk of rate and payment increases in the years ahead a better choice?
This brochure also helps the consumer consider other options such as tapping into the equity in their homes by refinancing their existing mortgages, taking out a second mortgage, or obtaining a home equity line of credit.
Created with the Center for Responsible Lending, a nonprofit "dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices," this useful brochure helps consumers better understand what types of mortgage are best for them.