Most Common Types of Home Loans
Thinking about financing is one of the most important steps when you are planning to be a homeowner. Unless you are prepared to purchase your home in cash, you are probably intending on shopping for a mortgage to assist in purchasing your new home. Sounds like a lot to consider, doesn’t it? You don’t have to be intimidated with the home buying process with The Farren Group in your corner!
Fixed Rate Loan
Fixed Rate loans are the most common type of loans for most home buyers. Fixed rate loans consist of a single interest rate for the life of the loan typically lasting from 15 to 30 years. Fixed Rate Loans are perfect for those who won’t be going anywhere anytime soon.
2. Conventional Loan
Conventional Loans are great for buyers who have saved up the money for the down payment on their home. This loan usually offers the best rates and terms and the lowest monthly payments. This type of mortgage has fewer requirements since it is not a part of a government program.
3. VA Loan
Veterans Affairs Loans are made for those who have served in the military. This loan is great for veterans who have served 90 days consecutively during wartime, 180 during peacetime, or six years in the reserves. However, there are strict rules regarding the type of home you can purchase. It must be your primary residence, and it must meet “minimum property requirements”, no fixer uppers.
4. USDA Loan
USDA Loans are designed for buyers living in rural areas. These loans are financed 100% by the government meaning that no down payment is required. This loan is right for families living in rural areas who are struggling financially.
5. FHA Loan
FHA loans are backed by the Federal Housing Administration. FHA loans are considered the “first time home buyer” loans, but can actually be available to anyone. The down payment is only 3.5% and is more forgiving of lower credit scores. The disadvantage of this loan is that you will have to pay mortgage insurance which will increase the size of your monthly payments.
6. Adjustable-Rate Mortgage
ARM are usually great for home buyers with lower credit scores. Since people with poor credit typically can’t get good rates on fixed-rate loans, an ARM can nudge those interest rates down enough to put homeownership within easier reach. These loans are also great for people who plan to move and sell their home before their fixed-rate period is up and their rates start vacillating.
There are many different types of mortgages available for buyers with different needs. Figuring out what type of loan you will need can be overwhelming, especially if you are a first time home buyer. The Farren Group specializes in assisting buyers every step of the way. From finding your dream home, to deciding which home loan is best for you and your family. The Farren Group has got you covered! Contact us today!
The Farren Group
Keller Williams Peachtree Road