Mortgages can vary as widely as the houses they finance. Loans accommodate different financial histories and backgrounds in the same way that different homes fit different kinds of living preferences, space demands, and guests. Make sure you find the best fit before you commit.
Open-Ended vs. Close-Ended
This is one of the most basic distinctions when it comes to loan types. Open-ended loans can be borrowed repeatedly. Credit cards are a great example of this kind of loan. Close-ended loans must be paid off before they can be used to borrow money again; such is the case with mortgage loans.
Secured vs. Unsecured
A secured loan requires collateral on behalf of the borrower to vouch for their security, whereas an unsecured loan does not. Unsecured loans have higher scrutiny and can be harder to qualify for; mortgage loans are based on financial history, credit, and income because they are unsecured loans.
Conventional vs. Government
Governmental bodies do not insure conventional loans. The FHA and other organizations simply back government loans. The majority of mortgage loans are conventional, and therefore applicants need to understand the qualifications that banks and other lending bodies require for approval. Mortgage brokers can become an indispensible resource when it comes to getting information about the type of loan you need.
For more information about available loans, bring your questions to a mortgage broker at 803-765-1680 or toll–free at 800-854-9484.