Loan Options For Your Mortgage

Loan Options For Your Mortgage

Loan Options for Your Mortgage
There are many new types of​ loans available for financing your new home purchase .​
Determine the​ length of​ the​ loan .​
You have a​ few options such as​ 15 years,​ 20 years or​ 30 years .​
There are even some circumstances when the​ loan can be set for 40 years .​
This is​ how long the​ lender sets for the​ term of​ the​ loan .​
a​ shorter length of​ the​ time will give you​ higher monthly payments,​ but less interest will be paid .​
Decide on​ the​ type of​ mortgage .​
a​ fixed-rate mortgage is​ the​ most common with a​ fixed interest rate over the​ life of​ the​ loan .​
In the​ United States you​ have the​ option of​ a​ government insured FHA loans or​ a​ VA loan available to​ veterans who have served in​ the​ U.S .​
armed services .​
Your typical loan payment includes interest and principal .​
With time,​ the​ principal is​ paid down .​
Other factors affecting your payments might include the​ option to​ pay interest only for a​ certain period .​
This will allow you​ to​ make lower payments but doesn’t reduce the​ size of​ the​ loan .​
A negative amortization loan allows you​ to​ pay less than interest-only .​
The shortage of​ the​ payments are added to​ your .​
This type of​ loan offers the​ lowest possible payment for a​ minimum number of​ years .​
A hybrid loan is​ a​ type of​ loan where the​ terms are fixed for a​ certain period but payment options vary .​
a​ 30 year fixed loan that allows interest-only payments for the​ first 10 years is​ a​ hybrid loan .​
An Option ARM mortgage loan is​ complicated .​
They are adjustable rate mortgages with the​ options of​ a​ payment and interest variety .​
Piggyback or​ combo mortgages are first and second mortgages combined .​
Borrowers take out two loans if​ they have less than the​ 20% down.
Another type of​ special mortgage loan is​ the​ bridge/ swing loan .​
With this type of​ loan the​ seller uses the​ equity in​ the​ first home to​ buy another home .​
A Reverse Mortgage is​ available for anyone over the​ age of​ 62 who has enough equity in​ their home .​
the​ lender makes the​ monthly payment to​ the​ borrower as​ long as​ they reside in​ the​ home .​
Many mortgage loans come with a​ prepayment penalty .​
You must make this payment if​ your loan is​ repaid too quickly .​
If you​ have a​ prepayment penalty in​ the​ original loan you​ will have to​ pay a​ penalty according to​ the​ terms of​ the​ loan.
You may be allowed to​ cash out on​ the​ equity in​ your home .​
The value of​ your home rises over time allowing your use that equity for financial needs .​
Generally lenders won’t allow you​ to​ cash out until 6 months to​ a​ year after you​ purchase the​ home,​ no matter how much equity is​ built up.
Many mortgage loans are available for real estate investors .​
Using 100% financing for single-family homes gives the​ investor leverage .​
Lenders restrict the​ total number of​ properties an​ investor may finance .​

By doing some research and asking questions,​ borrowers can find the​ financing that will fit their needs.

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