Different Types of Mortgage Funding Options
When it comes to mortgages, there are actually various types of it that are available. It’s within your advantage to know about each mortgage type before your start on looking for the next property. Many people actually considers applying for fixed-rate mortgages. With a fixed rate mortgage, the interest rates actually stays the same for most of the term of the loan, which actually ranges from 10 – 30 years. An advantage through this kind of mortgage is that you will know how much the mortgage payment will be and that you could plan for it, but the property taxes and homeowners insurance may change during the repayment period of the mortgage.
A good advantage about an ARM is that you will be able to afford the more expensive homes because its initial interest rates are lower. You also could find several government mortgage programs to which includes the Veteran’s Administration’s program, Department of Agriculture program, Federal Housing Administration mortgages and also the conventional loans. You should consider discussing your financial situation with the real estate broker regarding the different loan options before making a start on your shopping for a mortgage.
In the article below, you will be able to know about the main types of mortgages:
Conventional mortgage loans need a minimum of 3% down payment. Private mortgage insurance or PMI is needed unless there will be a 20% down payment or if the lender has paid PMI will be offered by the mortgage firm. The mortgages likewise are offered for investors and owner occupants.
There is also the FHA financing where it requires a minimum of about 3.50% down. The FHA likewise will allow approved nonprofit organizations and family members in assisting homebuyers with down payment requirements. Another thing is that there’s the need for an upfront and monthly mortgage insurance. An owner occupied financing that’s being offered.
Another is the veterans administration where honorably discharged veterans or an active-duty personnel in the military who has met the qualifications are eligible for the no down payment mortgage financing. This kind of mortgage however will need an upfront funding fee unless the veteran is disabled. This however does not need any monthly mortgage insurance, but are only made available to owner occupants.
The last one would be the USDA financing to where this kind of program is made available through the United States Department of Agriculture. This kind of loan type allows zero down financing for the owner-occupied properties in some designated rural areas.
Every one of such loan types will offer various features and you need to research well first in order to determine which of the loan type will fit with your financial situation.