So after reading last month’s blog about renting or owning, you’ve decided to buy a house. Yes, the blog had so much mind-blowing, persuasive advice and opinions that you want to apply for a U1 mortgage. J
However, now you have no idea what type of mortgage is right for you. How long do you plan on living here? Will you be living in a rural area? Are you active or retired military personnel? These are some questions you need to ask yourself before making such a big decision.
Don’t fret though; we have some more information to help you figure out what type of mortgage is right for you!
Conventional Fixed-rate Mortgage
With a fixed-rate mortgage, the interest rate will remain the same throughout the life of the loan (typically 15 or 30 years). A fixed-rate offers long-term stability and is usually for someone who plans to stay in the home for an extended period of time. This is what the majority of home buyers prefer, and it makes sense if you want a stable monthly mortgage payment that doesn’t adjust.
Now, if you do want a monthly mortgage payment that adjusts, an adjustable-rate mortgage is right for you. With this type of mortgage, the interest rate will be low for an introductory period and then will adjust up to a certain limit, depending on the market.
Why would anyone want to do that?
Well if you plan to sell the house, move or upgrade within a short time period, you can take advantage of the low interest rate. Most homeowners, in general, tend move within six years. (Source)
There are some other reasons as to why you would choose an adjustable rate mortgage. Watch this short video from our own Mortgage department!
FHA Mortgage Loan
A Federal Housing Administration loan was created for low/moderate income households with subpar credit. But it’s also beneficial if you’d like a lower down payment or lower interest rate, regardless of your income.
These mortgages are government-insured. So to take advantage of the benefits, borrowers will have to pay mortgage insurance premiums upfront and, in most cases, throughout the life of the loan. Check out these 7 facts about FHA loans from bankrate.com.
VA Mortgage Loan
A Veterans Affairs Loan gives active or retired military personnel the opportunity to purchase a home with no down payment. You do need to meet certain requirements to apply, but you may even qualify for this government approved loan with a score in the low 600’s. VA loan eligibility
USDA Mortgage Loan
A USDA loan is offered by the U.S. Department of Agriculture Rural Development. So if you happen to be moving to a town with a population of less than 10,000, this type of mortgage could be an option. Some USDA loans have $0 down payments, but do have upfront fees like mortgage insurance. USDA loan eligibility
Check out our Tips page to find more information on mortgages, especially if you are a first time home buyer!
Remember, purchasing a home is a big financial decision. Make sure you do the research and have all your questions answered.
And as always, we’re here to help! Leave us a comment below, email us at email@example.com or contact our Mortgage Services at 800-543-5000 ext.424.
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