What to Know About Home Loan?

Home loan programs are available for everyone. There are different types of home loan programs to choose from. If you are a first time home buyer, it is important for you to know all your available choices so that you can choose the one that best fits your financial situation. Many home buyers are looking for a mortgage that requires little down payment. Finding such type of mortgage isn’t difficult at all because most home mortgage loans only ask for minimum down payment. As a matter of fact, some do not even require down payment at all.

Home Loan Programs to Choose From

No down payment
• VA Loan – The Veterans Affairs loan is one of the home mortgage loans that is easy to obtain. It is designed to help the veterans and their families to get home financing. A veteran, an active military who has served the minimum years of service, and a surviving spouse can all qualify for VA loan. A lot of mortgage lenders approve this type of loan because it has the Veterans Administration backing. So, the risk is lesser as compared to other types of loans. Many people opt for this kind of loan because it requires no down payment and no mortgage insurance. There will be a funding fee, and it ranges between 2.15% and 3.3%. You don’t have to worry about it because it can be rolled into the loan amount.

• Navy Federal Credit Union – It has the largest membership of over 2.5 million. It is regulated by the National Credit Union Administration, the biggest credit union in the United States. It is limited to the navy, active duty Marines, civilian employees, reservists, and retirees. It offers 100% financing to qualified members. It is somewhat similar to that of the VA loan. The only difference is the funding fee cost. The Navy Federal Credit Union funding fee is only 1.75%, which is lower than the VA loan.

• USDA – It stands for the United States Department of Agriculture. It is helpful, especially for first-time home buyers. The USDA loan is also called rural housing loan, and there are housing and income guidelines that should be met. It offers two types of loans, and these are direct and guaranteed. If you choose the direct loan, then you can only obtain it through the USDA office. Guaranteed USDA loan is preferred by many because you can avail it through eligible lenders. USDA loan has been a big help to people with low to moderate income. For you to qualify, you have to be a citizen of the United States or at least a qualified alien residents. Of course, you need to meet all other eligibility requirements.
Low down payment

• Private Mortgage Insurance (PMI) – With this type of mortgage, a borrower can make a down payment as low as 3%. This is a pretty small down payment as compared to other types of home mortgage loans. The only downfall of PMI is that it has a strict credit requirement.

• Federal Housing Administration (FHA) – It requires a minimum down payment of 3.5%. What’s great about this type of mortgage loan is that it can be a big help to people who have a not-so-perfect credit record. The FHA loan is insured by the Federal Housing Administration. A lot of lenders are willing to grant you this loan because, in the case of borrowers default on payment, the FHA will be the one to repay the loan. Aside from the low down payment, borrowers can also benefit from the low closing cost. The closing cost is also included in the loan amount. You are also required to pay a mortgage insurance premium (MIP). On the other hand, the FHA loan has a maximum loan limit. The amount varies depending on the average cost of housing in a particular area.

Know your Needs and Financial Situation

Home ownership is a dream of everyone. However, not everybody is blessed to have enough money to purchase a house. Good thing there are different types of home mortgage programs to choose from. As a home buyer, it is important for you to know all your available options so that you can select a mortgage loan that can best help you with your home purchase. The down payment is a big factor, but more than this, you have to consider all other important details such as the interest rate, loan terms, and so on. Do your research well. Attend Real Estate Seminars of Marco Kozlowski At Will Events to get some tips.

There are many lenders out there, and each of them has an edge over another. It is important to compare several lenders, ask for feedback and referrals, and check the credibility. You surely don’t want to end up with a lender who imposes a high-interest rate on your mortgage. At the end of the day, it all boils down to making an informed choice. Know all your available options and compare them with your needs and financial situation.

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