Have you found your dream home? Make sure you choose the right type of loan program for financing the purchase.
While moving to a new home is an exciting phase in life, the financials associated with the process can be pretty stressful. If you’re looking to buy a home, you’re probably exploring the different financing options available to you. Let’s take a look at some of the different types of loan programs offered by one of the best mortgage advisors in the region.
Conventional Fixed-Rate Mortgage
These are mortgage loans that keep the same interest rate over the life of the loan, which means you’ll pay the same amount every month in rent. It comes in terms of 10, 15, 20, 25 and 30 years. With this option, you should be able to budget other monthly expenses more precisely. The mortgage option is ideal for you if you plan to stay in the home for at least 7 to 10 years because it offers stability with payments.
Conventional Adjustable Rate Mortgage
The conventional adjustable-rate mortgages are subject to interest rate fluctuations based on market conditions. There are ARM options that include caps on how much the interest rate can increase, so you don’t face financial trouble afterward. Certain ARM products will charge a fixed rate for a few years before the mortgage turns into a variable-rate loan.
FHA mortgages
FHA loans are designed for homebuyers who haven’t saved a large amount for down payment or don’t have clean credit. These can be fixed or variable but require a minimum FICO score of 580 to get 96.5% financing at a 3.5% down payment. With a 10% down payment, however, you may be accepted with a 500 score.
VA mortgages
These are flexible, low-interest mortgage loans available to those serving in the US military as well as to their families. VA loans don’t require private mortgage insurance (PMI) or a down payment and can be fixed or variable. Borrowers are supposed to pay a funding fee as a percentage of the loan amount.
Jumbo loans
These are conventional mortgages with non-conforming loan limits. These typically require in-depth documentation and are more commonly used in high-cost areas.
USDA loans
Best for moderate to low-income borrowers, USDA loans allow you to buy a home in a rural area. You can only for a home in a USDA-eligible area and fulfill certain income requirements to qualify. Certain eligible low-income borrowers may not even be required to pay the down payment.
These were the most common types of loan programs offered. To explore the full spectrum of mortgage options offered by Elite Mortgage Source, take a look at their Products Page.
Now that you have a fair idea about the different types of loan programs available, you should feel more confident in making a decision.
To apply for any of the loan programs discussed above, contact Elite Mortgage Source today!
