What Is A Customized Mortgage?
Getting a mortgage for your home can be a pretty complicated experience, since there are so many different terms and options that you need to think about. Is an adjustable-rate mortgage better than a fixed-rate mortgage? What is a jumbo mortgage and how will your options change if you are a veteran? However, there is one option that has recently become pretty popular for its versatility, and that is the customized mortgage. Many different lenders will offer such an option, so it's a viable option to consider when it comes to financing your home. To help you get a better idea of whether a customized mortgage is perfect for you, here are some of the most common features that you will find in a customized mortgage:
The General Idea
The basic premise is that a customized loan will allow you to get a loan that fits your exact needs. This often means consulting with a lender to help answer some basic questions, which will be used to help you figure out the kind of loan that you are looking for. In some cases, this process can end up with you being directed to a vanilla ARM or FRM. In others, you might end up needing to modify the loan duration a bit, or change the size of the down payment that you are paying.
When it comes to picking a limit for a loan, many regular loans have very specific durations. 10, 15, and 30 years are all quite common. If you have a strict plan in mind and wish to pay your loan off in 12 years instead of 15, then getting a customized loan can allow you to do that.
On top of that, individuals that want to pay off a mortgage in a short period of time without resorting to a balloon mortgage (where there is a huge spike in payment size at the tail end of the repayment) can use a customized mortgage to pay off a loan in 7, 8, or 9 years, or even less.
The down payment can be one of the biggest factors in determining the right mortgage for you since it is so important to pick an option that is right for you. If the payment is too large, then that could lead to a shortage of cash that will prevent you from easily making the first few payments on your mortgage. If the payment is too small, then the interest rate, in the long run, will be even higher, and you will end up paying a lot more than is necessary.
With a customized mortgage, a lender can help you find benefits that you might have otherwise missed. For example, veterans can get mortgages with extremely low mortgages. For further assistance, contact a commercial real estate broker, such as one from NAI Capital.