A Look at Flexible Mortgage Programs

Allison Beatty
LoanBiz Columnist

Article Rating , 4 out of 5 based on 1 votes

If flexibility is the key to your mortgage needs, look around at all the mortgage types on the market. You'll find adjustable rate and hybrid mortgages that offer down payment and monthly payment schedules to meet almost any need.

Defining Mortgage Flexibility

When looking for a flexible mortgage, think about why you need flexibility and for how long. If you are working through a temporary financial setback your needs will be different than if you are refinancing to pay off credit card debt. There should be several home loan programs that fit your situation.

Adjustable rate mortgages address your financial issues in two ways:
  • An adjustable rate mortgage helps with temporary financial setbacks. The rate will adjust upward in three or five years and/or switch to a hybrid mortgage loan with a fixed rate. Ideally, you should be back on your feet financially before the rate increases.
  • An adjustable rate mortgage with an interest only payment schedule offers a temporary income reprieve. With this type of home mortgage, you only pay the interest, which reduces your payments significantly. This works well for those who want a lower monthly cash outlay and plan to pay extra toward the principal or move in the short term.

Get Help Before Selecting a Mortgage

All the variety in mortgages can be confusing. Before selecting a mortgage, talk with two or three home mortgage lenders about the details of their loan programs. Also consider:
  • How long you plan to live in the house.
  • Your feelings about market risk and the potential for adjustable rates to rise.
  • Any loan origination fees or points.
There are many ways to finance a new home purchase or a refinancing to reduce debt or lower monthly loan payments. Before taking the plunge, spend some time shopping around to traditional mortgage brokers and online lenders.  The results can be rewarding, both personally and financially.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.

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