Different Types of Home Loan

» Posted by on Nov 11, 2019 in Home Loan | 0 comments

If you are looking for a home to buy, there’s a possibility that you must also be searching for mortgage loans. There are several factors in determining what mortgage loans really suit for you in terms of your loan amount and situation. These factors include where you live, how long are you planning to remain in your current home, and much more. If you select wisely, it would be beneficial for you since it can assist you in saving plenty of interest, fees, and payment.  

There are several types of home or mortgages loans available now such as jumbo loans, adjustable-rate mortgages, fixed-rate loans, VA loans, FHA loans and more. Every home loan might have specific standards or particular down payment for interest, mortgage insurance, and loan amount, To know and be aware of all options you can choose from in terms of buying a home, keep on reading about the different home mortgage types for you to decide on what’s the best type of loan you must avail. Keep in mind that the mortgage type you’ll be having could impact your monthly payment. Here are the following: 

Fixed-rate loan 

A fixed-rate loan is the most used type of standard since it suggests a single interest rate, which could be paid monthly until your loan ends—usually 15-30 years. A jumbo loan is a kind of fixed-rate mortgage. 

Adjustable-rate Mortgage 

Adjustable-rate mortgages—known as ARM—provide relatively lower interest rates compared to what you can have with a fixed-rate mortgage for a time—like 5 -10 years, instead of your loan’s life. However, your monthly payments and interest rates will eventually adjust, normally once per year, approximately conforming to the existing interest rates. Hence, once the interest rate increases, your monthly payment increases as well. And once they decrease, you will be paying less when it comes to mortgage payments.  

VA loan 

If you have served in the US military, a VA (Veterans Affairs) loan would be a great substitute to a standard loan. If you are qualified to get a VA loan, you could own a nice home without requirements for mortgage insurance and down payment. 

Bridge loan 

A bridge loan can also be termed as a repeat financing or gap loan. This type of loan is your best shot if you are buying a home before you sell your previous home. Lenders will be wrapping your new and current mortgage payments as one. The moment you sold your home, you pay off that refinance and mortgage. 

FHA loan 

While the common mortgage loans need a 20% down payment of your home’s purchase price, with FHA (Federal Housing Administration) loan, you could provide down payments are less as 3.5 percent. This is possible since FHA loans are backed by the government. 

USDA loan 

USDA Rural Development loan is also one of the mortgage loans that’s backed by the government. This is primarily intended for those families residing in rural places. There is no need for down payment since the government sponsors 100 percent of the home price. Also, this loan provides discounted mortgage interest rates to strike.  

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