Which Home Loan Should You Choose?
It is not cheap to buy a new home, and that is a fact. Good thing, home loans are available for those who cannot afford to take out a huge amount. What is more, they come in different types to cater to the specific needs of homebuyers.
Many banks and lending institutions provide home improvement loans so their clients can own their dream house as soon as possible. The list below may help if you are still undecided at which type you should choose.
Conventional Mortgages
Conventional mortgages come in two forms: conforming and non-conforming loans. Conforming loans comprise of loan amounts set by the federal government. Meanwhile, non-conforming loans comprise of larger loan amounts, not limited by the federal government. If you are buying a high-end house that you know would cost a lot, you may want to avail of a non-conforming loan. Non-conforming loans such as VA, FHA, or USDA have lower credit requirements and 0% down payment. You can refer to the usda mortgage map to check for eligibility. You do need to keep in mind, though, that conventional mortgages are not insured by the federal government.
Government Insured Mortgages
If you cannot make a sizable down payment when purchasing your new home, you may want to apply for a government-insured mortgage. You need to have a high credit score to be eligible to apply for this type of loan, though. The best thing about this loan is that your home mortgage proceeds are insured by the government in case untoward events occur.
Fixed Rate Mortgages
If you do not want to (unexpectedly) spend more money than what you have expected in mortgage fees, then a fixed rate home mortgage is for you. Not all types of homes are good for fixed mortgages, though. Check the new build homes in St. George, Utah or in wherever state you live if they are good for fixed-rate mortgages.
Adjustable-Rate Mortgages
If you have a negative credit score, it would be unlikely that you will get approved for a fixed rate mortgage. It is not the end of the world if you have such a bad credit score, though. There is still an option, like an adjustable-rate mortgage. This may be the right type of home mortgage for your current situation. The best thing about adjustable-rate home mortgages is that if the prevailing interest rate for the year decreases after five to 10 years of your mortgage term, your mortgage fee subsequently decreases, as well. The bad news is that if the prevailing interest rate increases for the year after five to 10 years of your mortgage term, then you would have to pay for a higher mortgage fee.
Do some extensive analysis of your personal circumstances and financial capabilities before you avail of any type of home mortgage loan. Remember that if you make a mistake of availing a home loan that is not right for your financial situation, you may lose your newly purchased home altogether. Consult a real estate expert or a home mortgage expert to make sure that you are availing the home loan that is right for you and your family.