The Best Home Loan For You

The Best Home Loan For You

The Best Home Loan For You
What Type of​ Home Loan is​ Best for Me?
While it​ seems there are countless loan options,​ many of​ the​ programs offered by lending institutions are similar,​ so it​ is​ helpful to​ know a​ few of​ the​ basic ways in​ which they differ.
The first basic difference is​ whether the​ interest on​ the​ loan is​ fixed or​ adjustable .​
Fixed rate mortgages keep the​ same interest rate for the​ life of​ the​ loan,​ whereas adjustable rate mortgages (ARMs) change the​ interest rate after a​ set period of​ time.
The second basic difference is​ whether the​ mortgage is​ backed by conventional means,​ i.e .​
private lenders,​ or​ the​ government.
So,​ how can you​ know which of​ these loans is​ best for you? a​ few simple questions can get you​ off on​ the​ right foot and save time in​ your search.
1 .​
How long do I​ plan to​ keep this property?
If you​ are planning to​ stay for a​ long period of​ time,​ more that 5 or​ 10 years,​ fixed rates often give a​ secure base in​ case of​ increasing rates in​ the​ future .​
If current rates are not high,​ this can be a​ great way to​ get locked into a​ good rate without the​ risk of​ higher payments in​ the​ future.
Adjustable rate mortgages (ARMs) often offer a​ lower introductory rate,​ but also carry the​ risk of​ changing to​ a​ higher rate at​ the​ end of​ that period .​
The time period over which the​ rate will change differs from loan to​ loan .​
If current interest rates are high,​ an​ ARM could allow you​ to​ get a​ home now with an​ interest rate that will decrease in​ the​ future .​
If you​ are only staying for a​ short period of​ time,​ you​ can use the​ lower interest rate without the​ risk of​ a​ future increase.
2 .​
How much can I​ afford for a​ down payment?
Both conventional and government loans offer programs to​ help people with less than the​ standard 20% for a​ down payment,​ so there a​ few to​ be aware of .​
Many of​ these loans allow you​ to​ purchase a​ home with as​ little as​ 3% down .​
FHA loans are generally for smaller amounts,​ geared toward first time home buyers .​
VA loans are offered specifically to​ veterans.
Once you​ have an​ idea of​ the​ type of​ loan that may work best for you,​ it​ is​ important to​ look into the​ specifics of​ that type of​ loan to​ ensure the​ best fit for your plans.

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