A home purchase loan is a financing option to use when you’re ready to buy a house.
These loans are set up so you repay them over time at a set rate, so you know exactly how much you’re paying for the home. The interest rate can vary depending on what you and your loan expert decide is best for your budget and expected future income.
When you’re ready to research your choices, you’ll want to start by finding out how much you qualify for. Lending professionals base this decision on your current income, as well as your assets. The loan expert you work with will explain how the housing market fluctuates over time in favor of either buyers or sellers generally, but with their help, you’ll get the best deal possible in your budget range, and your loan will have the rates and terms you’re looking for.
A home refinance loan is used when you’re ready to lower your current interest rate, as well as your monthly mortgage payment. This option is used for two main reasons. If you decide to use it for cashing out part of your home’s equity, you’ll be able to finance another major purchase. If you decide to refinance for a lower interest rate, you can lower your monthly mortgage payment and save money over time. You can also use this option to eliminate FHA mortgage insurance. Talk to your loan expert about this choice and they will explain whether they see it as a beneficial choice for your needs.
A cash out loan is an option where you refinance and borrow more than the balance to pay off your existing mortgage. The difference between your new refinanced mortgage and the existing mortgage is the amount of cash you receive. This process also lets you lower the interest rate you’re currently paying. There will be closing costs on a loan like this, so consider that as well as the amount you would be saving each month, before you apply for this type of loan. Your loan expert can walk you through the differences in detail and help you decide if this is the most efficient for your needs.
One of the many types of loans available when you’re ready to buy a house is a jumbo house loan. Loans are referred to as jumbo when they aren’t covered in full by specific lenders. They typically have higher interest rates, but in recent years, have been offered at lower rates than traditional mortgages. There are limits on these loans set by Fannie Mae and Freddie Mac. For lenders, the risk has more to do with the amount of the loan instead of the credit score of the applicant. If you want to find out whether you qualify for a loan like this, talk to your loan expert and have them evaluate your best options.
A VA loan is perfect for individuals who need a no-down-payment option when they are ready to buy a home. They are set up for veterans and are available to select applicants only. The lenders that offer these loans do so on a guaranteed basis, and that protects them if the applicant is unable to repay what they borrow. To apply, you must be a veteran, a current member of the military, or a spouse of an armed forces member.
An FHA loan is offered with a low down payment, and this could be as low as 3.5% of the total price of the home. They may also agree to finance the closing costs and simply include them in the loan amount. On top of that, the closing costs are low for these loan types, making it an affordable option for applicants who are approved.
If you want to find out more about either of these loan choices, talk to your loan expert so they can make personalized recommendations for your needs.
Reverse mortgages are offered to senior homeowners so they can eliminate their monthly mortgage payments. They are still responsible to pay the homeowner’s insurance, homeowners association fees and property taxes, but this gives them an influx of cash each month so they don’t have to worry about paying their other bills. The minimum age for a loan like this is normally 62 years of age, and it lets the applicant convert some of their home equity into liquid cash. Rather than making monthly payments to the bank or lender, the reverse occurs, and the lender makes payments to the borrower. Then, these are not paid back until the home is sold. To apply for a loan like this or see how much equity you have to borrow against, talk to a loan expert today.