Financing Your Home And Loan Options
The first step in buying a home is pre-qualification for financing. Pre-qualifying helps you identify and resolve any issues you may encounter in your application. Most home purchases today are made with bank financing. A mortgage is the loan a homebuyer needs in order to make up the difference between the down payment and the purchase price of the home.
The mortgage loan will be paid back in monthly payments. In addition to the mortgage payment your housing expense will also include property taxes and mortgage insurance. There are a variety of mortgage programs available, with fixed and adjustable rates, different time periods and payment options. A mortgage consultant can help you determine which program better suits your needs.
"A Good Agent" should offer their client resources and a list of financial institutions that can help with this process.
This traditional mortgage is a loan with a constant interest rate and equal payments during a set period of time, normally 30 years. The biggest selling point of fixed-rate loans is predictability, and they are particularly suited to people with steady incomes. If lower rates occur during the time of this loan you have the right to refinance. We suggest that you compare the costs of incurring a new mortgage, such as prepayment penalties and loan origination costs. Be sure to compare the costs of incurring a new mortgage, such as loan origination costs and points. It's also a good idea to ask about prepayment penalties. You may want to refinance your loan or pay it off early to eliminate thousands of dollars in interest.
ADJUSTABLE RATE MORTGAGES
The interest rate on an adjustable-rate mortgage changes throughout the term to stay current with the present interest rates. ARMs are most popular when rates are relatively high and appear to be dropping and when the difference between the ARM and the fixed-rate is greater than 2 to 3 percent. Different lenders offer variations in the front end of their ARM plans, such as the points you pay or discounted initial rates. To make a useful comparison of an ARM rate, consider the index upon which the rate is based, the margin or spread between that index and the rate paid, and the intervals at which the rate and payments are adjusted.
FEDERAL HOME ADMINISTRATION LOANS
Lenders offer FHA mortgages on a new or existing single-family home for as little as 3 percent down. FHA mortgages are also assumable. Sometimes a premium is required when the mortgage is assumed, then refunded when the note is paid off. Down payments are usually low.
VETERANS ADMINISTRATION LOANS
The Veterans Administration guarantees lenders against loss if a property is foreclosed due to default. These assumable loans are available to eligible veterans and may be used to buy, refinance, construct or repair a house. If the VA property appraisal is less than the sale price, the borrower pays the difference as a down payment.
Be sure to talk to multiple loan agencies. What one loan officer cannot or will not approve, another might. I can help you find the right lender. Finding the right loan officer can mean the difference between getting a loan and discovering the best loan and terms available. We work with the best loan officers in the business. Each gives our clients the personal attention and care they deserve. Even before you find the home you want to buy, it is important to find the right loan officer to help. Call Dan Berry today and let the expert start the process of seeing what you can afford.
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