Purchasing a home is one of the most important purchases for anybody who wants to raise a family and enjoy the privacy of your very own home. Buying a home involves a level of financial risks and while it is really promising to have your own home, it is crucial that you plan your purchase so that you can make a good future investment. We want to help our customer understand the different situations and circumstances that are involved with buying a home.
A fixed rate mortgage is one of the most popular financing options for homeowners. To simply put it, a fixed rate mortgage guarantees the borrower that throughout the life of the mortgage, your rates will be the same unless you decided to have it refinanced to a different mortgage option. The advantage of the fixed rate mortgage is that it does not rely on indexes once the rate has been decided on your loan. There are no fluctuations that you have to worry about and this saves you from possibly high mortgage payments if the interest rate becomes considerably high.
An adjustable rate mortgage (ARM) is very different from a fixed rate mortgage. With this type of loan the rates will vary throughout the course of your loan at intervals of your lock in period. The rates will vary based on indexes that are unique for each lender. A good thing about ARM is if the rates are going down, you can enjoy lower payments. The risk is when the rates go up your mortgage payment will increase. You have to be sure that your financial situation is prepared and ready to address those additional payments. However, the trend nowadays is outside conventional ARM. The hybrid adjustable rate mortgages are becoming more and more popular due to the way the rates are structured.
With Hybrid ARM such as 3/1 or 5/1 ARM, you will have a lock in period where you enjoy a low interest rate at the beginning. It could range from 3 to 5 years but some offer 7 to 10 years. After that period of low interests, the lenders use the index to position the rates to the current market. That means the rates can be slightly higher. The rates change every year as opposed to monthly in standard ARM. The advantage of this is that you do not have to worry each month about the rise and fall of the market. You can easily manage your payments and enjoy both the features of a fixed mortgage even for a temporary time period. This is ideal for those who wish to reside in the home for a few years, generally within the lock in period of 3 to 5 years and move on to a different home or if they have a larger mortgage payment and want to save some money in the first few years.
A down payment is like a partial payment to the home if they cannot or would not pay the house in cash. Not everybody has enough money to make a full down payment (normally 15% of the property’s market value) so a low-down payment mortgage options have become popular. Normally, mortgage insurance is necessary for low down payment loans to protect lenders from financial loss if the homeowner fails to complete payments.
In qualifying for a low-down payment mortgage, the borrower must fit the qualifications of the lender. They should have a stable income in order to support the monthly costs. They should also have a reasonable amount of money available to use as down payment. The borrower should also save money for other expenses, closing costs and obligations.
Since you are buying a home with low down payment mortgage, the selection of homes that you can get are a little more limited. Thus, you have to make sure that you are buying a decent, good quality and well located home that will continue to appreciate in value. Most lenders are very specific with these aspects like the amount of repairs for the property and condition of the house exterior. Nations Choice Mortgage can help you assess these costs and see if a low down payment loan will be possible.
These loans are government guaranteed, low down payment mortgages. This is ideal for those who do not have enough money to pay for a down payment. The FHA offers a guarantee to the lender that in case of a default by the homeowner, the FHA will pay the home. This increases the likelihood that the lender will offer a loan to the borrower since there is guarantee. The thing with this loan is that there is limit to how much you can borrow so your options may be slightly limited on the kind of home you can purchase. The good news is that it is accessible to all. Though it offers some form of convenience and assurance of getting an approval for the loan, the home buyer still has to address costs such as the MIP or the mortgage Insurance premium.
Veteran Affairs loans can be used by veterans and military families. The VA mortgage program offers guaranteed loans up to a certain amount depending on the state or county where the applicant resides. It is possible to get a loan for $400,000 or higher. To meet the basic financial requirements, your debt to income ratio must meet or exceed lender requirements. You should also know that there is interest rate applied to the loan so be sure that you calculate your costs before using this loan.
There are specific states in the US that were heavily hit by the recession, affecting the housing sector very badly. These loans though are specified for rural areas can still be used by qualified borrowers who want to buy a home close to a town setting. The borrower must prove that they have income limitations so they cannot make a down payment for the home. The borrower should also have a credit score of at least 600 or more to be considered for this housing loan. In some cases, loan guarantees ranging to 3.5% of the loan is required but it could be wrapped into the loan so that the person does not have to pay any cash up front.
As you can see, there are many options, no matter what your financial condition is, that are intended to help you buy a home. Buying a home can be very confusing for those who are not well informed about the various options that they have. You have to do considerable research since it is not just about the loans or payments where it matters. Buying a home is an investment and you want to get one that will rise in value. You also want a home that will fit your needs that you can keep in good condition and something that you are sure that you would want to stay for several years to come.
If you are considering buying a home, Nations Choice Mortgage can help you begin the process of applying for a loan. Nations Choice Mortgage has a well-trained team of mortgage specialists that are always available to help you make the best decision with your mortgage-related needs. We understand that choosing the right type of mortgage for your needs is a big decision and we are always here to help you make an informed choice.
To begin applying for a home loan all you need to do is search rates and you will receive a personalized interest rate quote. You can then choose the type of loan and interest rate which fits your needs best. Your mortgage application can also be completed online using our advanced online mortgage application. If you have questions anytime during the online application process, feel free to contact us and we will provide you with all the information you need.
Instant Mortgage Rate Help
Loan Amount: How much do you want to borrow? Example: 150,000 (You can borrow up to 100% of the purchase price of your home. You will find better interest rates at 95%, 90%, and 80% progressively.)
Property Value: This is the purchase price of your property or your best estimate of the appraised value of the property. Example: 175,000.
Loan Type: Selecting Refinance WITH CASH OUT may increase your rate. If you want some extra cash to pay the closing costs on your new loan, this would NOT be considered receiving extra cash.
Escrow/Impounds: Allows you to pay 1/12 of your annual property taxes and homeowners insurance with your mortgage payment each month. Escrowing your taxes and insurance will lower your points by .25%
Property State: Specify the State where the property is located
Property County: Specify the County where the property is located
Todays Rates: These rates are based on the following criteria..