Know Your Loans

When it comes to purchasing mortgages, there are several different types of loans from which you can choose. However, not all loans work to the buyer’s advantage. Let’s take a moment to discuss the most risky loans out there today. Remember, hiring a mortgage broker to help navigate you through the process brings you several advantages.

Subprime Loans

If an individual does not qualify for prime loans, they can apply for a non-traditional loan with higher rates. The problem with this loan is that most individuals are not able to fulfill their payment obligations. This often leads to foreclosure and on some occasions, bankruptcy.

Stated Income Loans

Though this loan gives the borrower the ability to avoid providing proof of income, it also leaves him with all the liability. So if he defaults, he could be charged with fraud. This loan encourages the borrower to purchase a house they can’t afford.

Option ARMs

ARMs lets you decide between paying interest only or a minimum amount. The difference between your interest and minimum payment is then added to the mortgage. This makes you responsible fiscally and leads to your owing more than the house is worth.

Interest-Only Loans

This loan allows you to pay interest only for three to ten years. After this, you begin to pay down the principal and interest. The risk comes in when you can’t cover these payments. This is usually only helpful to those who plan to move out before their ten years is up.

Advantages of Hiring a Qualified Mortgage Broker

As you can see, these mortgage loans are not for everyone. Depending on your financial status and needs, they may do more harm than good. However, if you decide to take out a mortgage you should hire an experienced mortgage broker. Why?

1. We are familiar with the process. We can explain the ins and outs to you, and help to make the required paperwork less intimidating.

2. We can save you money. We have access to numerous lenders and are thoroughly knowledgeable about each. This will help you to avoid the costly mistake of choosing a loan that does not suit your needs. Also, we can find discounts that you may not be aware of.

3. We save you time. Hiring us will save you the time it takes to interview numerous credit unions, banks and lenders. We are a one stop shop.

If you are in need of a mortgage, give us a call and let us help.