California Mortgage Loan Company What are Your Mortgage Options?

Many new home loan programs make it possible for anybody to get

approved for a mortgage regardless of credit or income. Because of rising home

prices, many qualified loan applicants are finding it difficult to

afford a new home. With these individuals in mind, several loan companies

have started recommending a range of mortgage loans offering affordable

monthly payments.

The 40-Year Home Mortgage

Traditionally, home mortgage loans have a term of 30-years. Those who

can afford a higher monthly payment, and who wish to payoff the mortgage

earlier may opt for a 15-year term. Ideally, paying on a home loan for

30 years would offer an affordable monthly payment. However, due to an

increase in home prices across the nation, many young couples and those

with modest incomes are unable to afford overpriced homes.

The 40-year home loan is similar to the 30 and 15 year terms. The only

difference is that the mortgage is extended an additional 10 years. Of

course, homeowners will pay more interest. The 40-year mortgage does

not offer a tremendous savings, but it may provide a cushion. On average,

homeowners can expect a monthly savings of about $200 on a $250,000

mortgage.

Interest-Only Home Loans

Within the past five years, interest-only home loans have increased in

popularity. Again, these loans are advantageous in overpriced housing

markets. Nonetheless, there are pros and cons to these sorts of home

loans.

With an interest-only loan, homeowners only pay the interest for a

specific term, usually five or seven years. However, you may obtain a loan

with an interest-only period for three or ten years. During the

interest-only period, all payments are applied toward paying the interest, and

not reducing the principle. Thus, mortgage payments are lower.

Interest-only loans are beneficial because they create more affordable

housing. The downside is that once the interest-only period ends,

mortgage payments will increase.

Because monthly interest-only mortgage payments will not reduce the

principle balance, at the conclusion of the interest-only period,

homeowners will owe the original mortgage amount. If the housing market

continues to increase, this will not pose a problem. However, if home prices

decrease, those who select an interest-only option may be unable to sell

their homes.

Carrie Reeder is the owner of http://www.abcloanguide.com. View her recommended sources for California mortgage loans online.

View her recommended California home mortgage loan lenders online. Also, view her recommended sources to order a credit report online.

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