Do you know the different types of mortgages available today?

If you are new to home buying and not sure about the different types of loans available to you read on...

• Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.
  
• Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow significantly in the coming years.
  
• Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.
  
• Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.
  
  Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment.

Information provided by Realtor.org.

FHA the Federal Housing Authority is looking to require more from home buyers this coming year to obtain an FHA loan.

Currently, borrowers have to make at least a 3.5 percent down payment and have a minimum FICO credit score of 500. Almost 30 % of the loans made in 2009 have been though FHA loans.

Among the changes outlined  Wednesday were plans to increase the down payment and FICO score required. The agency also may ask Congress for permission to increase either the upfront mortgage insurance premium, the monthly premium or both. Details of the plan are expected next month.

This could mean more up front costs to buyers looking for an FHA backed loan. Decisions are planed to be announce later this month to early Jan 2010.

The home buyer tax credit has been extended and opened up to people that have lived in their homes for more than 5 years and wish to move to another home.

Qualifying buyers must sign a purchase agreement by April 30, 2010, and close before July 1. More details can be find at the Illinois Association of Realtors and questions answered at the National Assoication of Realtors. Time is the of the essence! Call today to get ready. We can begin your home search or help you prepare your home for after the holidays!

This weekend the Grayslake Middle school will be showing The Wiz. Performances will be Dec. 10, 11 and 12 at 7 p.m. The cast consists of 38 seventh and eighth grades and a band of 18 in this wonderful musical. Tickets can be purchase at the door for $5.

On December 14th and 15th a Night of Holiday Favorites will be presented also at the Grayslake Middle School. On the 14th you will enjoy the 7th grade Concert Band, Treble Choir and Jazz Band. On the 15th you will enjoy the 8th Grade Symphonic Band, Treble Choir and Jazz Ensemble.

Come on out and enjoy the fun!