... All right, so now that your credit has checked out and you are knowledgeable on what the current interest rates are, it's time to talk about what the right financing for you could look like. I would like to stress that talking to a lending professional is highly advisable at this point in time since financing terms and options change rapidly. With that said, here are some of the most common loan programs:
Conventional and Government Loan:
FHA - loan:
The Federal Housing Administration (FHA) falls under HUD (Department of Housing and development) and offers loan programs that have lower down payment requirements and are easier to qualify for than conventional loans. If this is your first home it might be worth looking into.
VA Loans:
Similar to the FHA, VA is another government agency backed loan with low down payment requirements (sometimes no downpayment is required) and they are easy to qualify for if you are eligible. These loans are backed by the department of veterans affairs, if you are a vetaran, definitely look into this option.
Conforming Loans:
Loans that follow rules and guidelines set forth by Fannie Mae and Freddie Mac (see link on the bottom of this page for more information)
Non Conforming Loans:
Loans that don't abide by Fannie Mae and Freedie Mac rules.
Fixed rate mortgages:
Generally availabe in 40,30,25,20,15 and 10 year time frames, these mortgages feature fixed rates that stay the same over time and are calculated to pay off your mortgage balance in the agreed timeframe.
Interest Only Loans:
Generally interest only loans are set up for 2,3 or 5 years and end with a baloon payment. purpuse of these loans is to allow you to pay only interest for the first couple of years, to then refinance and start paying on the actual mortgage balance. Be careful with these loans, it is tempting to live in a home you cannot afford but it will catch up with you once the baloon payment is due and you have to refinance.
I suggest the following link to further investigate other alternatives:
And lastly, please speak to your mortgage professional to get a solid financial evaluation, it will be in your best interest! Get Pre Qualified!
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