A mortgage is a loan that you take to purchase a property. You will need to pay back the money that you borrow plus interest and other costs, such as points and broker fees over time. This payment is called a “mortgage.

There are many different types of mortgages out there depending on your needs! In this blog post, we will explain the different types of mortgages and how they work. Please feel free to consult with a licensed Long Island Mortgage Broker about this information and any other questions.

Fixed-Rate Mortgage 

A fixed-rate mortgage is when your interest rate for the life of the loan does not change, therefore you will always know what you are paying each month in terms of an interest payment. This makes planning and budgeting easier!

Adjustable-Rate Mortgage 

An adjustable-rate mortgage or ARM can also be called a variable rate mortgage. As the name implies, your interest rates can change throughout the life of the loan. This means that you will also be expected to pay more or less than what you originally agreed upon for part of your payment each month!

FHA Loans 

An FHA loan is a type of government-backed mortgage. This means that you will be able to put down less than 20% for the property and still qualify! However, there are specific requirements when looking at homes with an FHA loan so make sure you check out all of the details before applying.

Conventional Mortgages 

A conventional mortgage is another name used by lenders for what we think of as a “typical” mortgage. It is the most popular type of loan out there and does not require any government-backed insurance as FHA loans do.

There are also no specific credit score guidelines for this kind. This makes it great if you need help with improving your score or have had some bumps in the past!

I hope you learned a lot about mortgages in this post! If you are looking to purchase your first home, make sure you choose the right kind of mortgage for your needs.