Mortgage Loan Types

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Top Reasons to Get a Home Refinance

Fix-Rate-Loan-House

1. Fixed Rate Mortgage Loan

STABLE. PREDICTABLE. RELIABLE.

Many prefer this type of mortgage loan product, because even if all the other factors change, you can count on the amount due for the loan repayment to remain constant. Keep in mind, rising taxes can mean the total monthly payment rises, but only by the amount of the additional taxes due.

With today’s still historic low interest rates, if you are not absolutely positive you will be moving out before the adjustable rate mortgage will adjust, you may want a fixed rate mortgage to help you budget..

2.Construction-to-Permanent Loan

FRESH BUILD. NO REFINANCE. NO PREPAYMENT PENALTY

If you want a new home built for you, without the need to refinance when the construction is complete, you can consider a construction to permanent mortgage loan.Some things to remember when considering this type of loan; loan only has a single set of closing costs, No prepayment penalties, and interest only payments during construction.

Construction to permanent loans are used when a licensed contractor is building your primary residence or vacation home and you need to finance the construction.There is one close, because the loan changes to a traditional loan once the construction is completed.

Contruction-Loan

3. Adjustable Rate Mortgage Loan

LOWER INITIAL RATE. SHORT TERM

This mortgage loan type is often chosen if you will not be in the home long. Initial rates are usually lower on adjustable rate mortgages than on fixed rate mortgages, and you can choose this type of mortgage to purchase a home, but understand the advantages and disadvantages when compared to Fixed Rate Mortgage.

However, if you are still in the home when the first adjustment is scheduled, you will need to be prepared to pay the new payment amount. It can still cost less over the time you are in the mortgage, but it adds an element of uncertainty that you need to be ready for.

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4. Veteran's Administration Loan

LOW DOWN PAYMENT. VA FUNDING.

The Veterans Administration guarantees low down payment loans for veterans, active duty service members, reservists and National Guard personnel. The main benefits of this program include:

  1. Low or no down payment
  2. VA funding fee can be financed in the mortgage loan
  3. Gift funds for the down payment are allowed. This frees the purchaser from having to prove the funds have been seasoned, or in the bank for a certain amount of time.
  4. Limited income and credit history allowed, so you may qualify even with less credit experience.
  5. Terms offered may be either 15 year or 30 year amortization loans.

5. Low Down Payment Mortgage Loan

LOW DOWN PAYMENT. ALTERNATIVE CREDIT HISTORY.

if you do not have substantial down payment saved, you may still qualify for purchase of a home. Affordable Housing Loan programs offer:

  1. Low down payment
  2. Use of Alternative credit history (i.e. if nothing is reported on your credit report, you may be able to provide cancelled checks to prove a payment history.) This allows you to show your credit worthiness and can help you qualify to buy a home.
  3. Closing costs can be gifted or granted to you. This means, if you have very little money to put down, you may qualify for a grant allowing someone else to provide your closing costs
  4. Terms offered may be either 15 year or 30 year amortization loans.

Because you are not risking your own funds, by putting down a larger down payment, you will probably have to pay a monthly insurance premium in this type of loan program.

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