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Posted by nick_niesen in Home on October 29th , 2010


Listening to all the commercials on television and radio makes it appear that there is a home loan for anybody that wants one. For the most part, there is a home loan option for almost anybody.


Having acceptable credit, of course, is a key element but structuring home loans can take many forms depending upon conditions.


Traditional loans


If you are a first time home buyer or a seasoned home owner you are likely aware of the traditional 30 year fixed rate home loan. Mom and Dad had one and Grandma and Granddad had one. In the past, there were very few options in the home loan marketplace. Today, the traditional 30 year fixed rate home loan still exists and has even had a bit of a twist put into it. In recent years, many people are opting for a 15 or 20 year fixed rate deal to reduce interest costs. The idea of a traditional home loan is to have predictability in payments so a subtle shift to a shorter term is a big thing.


Variable rates


In the past , the variable rate loans were for real risk takers. It still does have a certain amount of risk associated with it but, generally, it can be a very sound way to go. The only real need is that you have the right set of circumstances working in your favor. With a variable rate home loan the interest rate is initially lower than a fixed rate loan for a set period of time (usually 3, 5 or 7 years.) After this period the interest rate changes as interest rates change.