Buying a home can be an exciting event in a person’s life. Whether it is the fact that you can paint the walls the colors you want, or just knowing that it is yours, there’s nothing better than owning a home. Obtaining a mortgage is part of the home buying process. There are many mortgages that can easily be used to buy a home, but they are not always the best ones. Here are the most popular loans:
Those who have had any credit problems or have filed bankruptcy can look at this type of loan. The down payments are typically three percent and the interest rates are super low. These loans have the ability to help the first time homebuyer, or those who have not had a home in their name for more than three years. They are more lenient with those who have suffered from bad credit and typically will finance anyone with a 630 FICO and above. This fixed line of credit is the prime choice for home loans.
Anyone who has served this country can qualify for a VA home loan. The loans are backed by the U.S. Dept. Of Veterans Affairs. The loan terms are favorable and there is almost always no down payment required. The approval terms are much easier that that of a convention loan. The loans can be written up to $203,000. While the VA doesn’t make loans themselves, the give a certificate that can be used at any financial institution.
Many people get ARM loans with the intentions of refinancing out before the interest rate rises. These loans do not have a fixed interest rate and can increase over a period of time. These loans are also known as the variable interest rate loans because they can go up and down according to the current interest rate. These loans are popular because they offer a chance to have a lower interest rate for a period of time. You may want to consider using a loan of this nature if your income is going to increase in the near future, or if you only want to sell within a couple years. Those who do house flipping may see a loan like this as valuable; they can get in and out with the least amount of interest paid. Many people get in trouble when they have an ARM because the payments can rise to out of comfort levels and they can be unable to pay the mortgage.
If you don’t qualify for a FHA loan, chances are you want the fixed interest conventional loan. This loan is the best for those who are in it for the long haul. If you don’t want to refinance and you plan on being here till the house is paid off, this is the loan for you. While they will require a higher down payment, the interest rates are at market value, which is usually low at this time.
Finding the right loan can be difficult, but you need to think of the future in order to make the right decision. Just because an ARM’s low payment looks good right now, the future may hold a whole other story. Making wise decisions about a mortgage will ensure that you have your home and it is not one sitting on the foreclosure list.
About the Author
Nicole Rodgers has been blogging in the mortgage, finance, and business industries for more than three years. When Nicole and her husband wanted to buy their first home, there were so many mortgages to choose. With so many choices, she turned to http://www.Lendingexpertblog.com to help decide what mortgage was right for them. Now, they are living happily in their new home living the American dream.