Make Sure You Enjoy Owning Your New Home Long After Your Closing by Choosing the Right Type of Loan

Buying a new home is a milestone worthy of the excitement it brings. Make sure you enjoy owning your new home long after your closing by choosing the right type of loan. Below is a brief description of some of the most popular loan options available today.

Fixed Rate Loans

With a fixed rate home purchase loan, you can have peace of mind knowing that the “cost” of your purchase mortgage loan will always “stay exactly the same.” So, if your rate happened to be say, 6% when you first get your home purchase loan, and your mortgage term is 15 years, it means that for 15 full years you’ll have a mortgage-rate that’s 6%. Fixed rate mortgages come in a variety of term lengths. Most fixed rate loans are for either 15 or 30 year terms.

Adjustable Rate Loans/ Adjustable Rate Mortgages (ARM’s)

An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on a variety of indices. Consequently, payments made by the borrower may change over time with the changing interest rate (alternatively, the term of the loan may change). This is not to be confused with the graduated payment mortgage, which offers changing payment amounts but a fixed interest rate. They can be used where unpredictable interest rates make fixed rate loans difficult to obtain. The borrower benefits if the interest rate falls. Today’s adjustable rate mortgages might be right for you. T

VA Mortgages

VA mortgage guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA mortgage guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

FHA Home Loans

An FHA Home Loan is a great way to go when purchasing your First Home. It is also a great program for purchasing specific types of homes such as SITE BUILT OR Manufactured, Doublewide Homes and Modular Homes. If you have a high interest rate in your present Home Loan or Mortgage this is also a great loan product to Refinance into.

An FHA Mortgage is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA MORTGAGE programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.

FHA MORTGAGE programs are particularly beneficial to those buyers with less available cash. The rates on FHA MORTGAGE are generally market rates, while down payment requirements are lower than for conventional loans.

Reverse Mortgages

A reverse mortgage is a home loan (used for any purpose) where seniors, 62 and older, can access the equity (cash) built up in their home.

There are several different reverse mortgage programs. Fannie Mae Home Keeper, Jumbo Cash-Out loan, and the HUD-insured Home Equity Conversion Mortgage (HECM) are three such programs. As demand increases, more reverse mortgage programs from different organizations will become available.

It is called a reverse mortgage because you borrow money from a lender, but the lender makes monthly payments to you, rather than you making monthly payments to the lender. All interest is paid at the end of the loan, rather than in the beginning.

Rural Development

Rural Development loans offer 100% financing for purchasing a home in rural areas. Rural Development mortgages will allow you to finance your closing costs and pre paid items. In some cases you are also allowed to finance repairs or up dates to the property. This could include fixing a roof, furnace, or a leaky basement. No minimum cash requirement for borrower at closing. The interest rates are very competitive.