House hunting can be one of the most exciting and nerve-racking times in a young person’s life. There are a million things to think of; what school zoning to look for, what style of house you like, and how much of a house you can afford. Choosing the right loan for your family is one of the biggest parts of the home buying process. While it’s best to talk to your lender about their specific terms and conditions, this list may help you understand what kind of loan would be right for your lifestyle.

Fixed Rate Loan – A fixed rate, sometimes referred to as a FRM or fixed-rate mortgage will never change over the life of the loan. Fixed rates have become more appealing to home buyers ever since the economy has gone into a recession. A fixed rate is also great if you plan on staying in your home for an extended period of time.

Adjustable Rate Mortgage – also known as ARMs, adjustable rate mortgages have become a less desirable loan in the U.S. Many people don’t realize that in some countries, an ARM is a standard loan. Adjustable rate mortgages are periodically adjusted with the markets, and some are capped to protect the borrower.

Balloon Mortgages – These mortgages are structured similar to the fixed rate loan, but are shorter than the typical 30 year mortgage. Balloon loans usually range from five to seven years and at the end of the loan, the final balance needs to be paid in one lump sum. The lump sum doesn’t necessarily need to come out of pocket; it can come from refinancing the home or selling it. This loan may be a good option for homeowners who are considering moving in less than five years.

Interest-Only – This loan allows you to make “interest only” payments for a period of time, which helps reduce your monthly payment. Once this interest only period expires, however, your payment will increase since you will begin starting to pay down your principal as well. This loan may work for business owners or corporate ladder climbers who anticipate a higher income each year.

Biweekly Mortgages This loan may interest a home buyer looking to own their own as soon as possible. A biweekly mortgage allows borrowers to make payments every two weeks, which is 26 (half) payments a year versus 12 full monthly payments. This is equivalent to paying one extra payment a year, which can reduce your term.

If you’re looking for Cherry Creek homes for sale, please check out our blog at PorchLight.com or contact an experienced Cherry Creek Real Estate Agent.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Cherry Creek CO or specific neighborhood homes please visit www.porchlightgroup.com.

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