How much home can you afford?
What are my financing options?
Fixed Rate loans are the most popular loan programs because they offer a predetermined, fixed interest rate for the entire term of the loan that protects homeowners from payment surprises. While taxes and insurance may change, the base loan payment will not fluctuate. You can select almost any term on a fixed-rate loan, but they are usually quoted as either 15 or 30 years.
The longer the term, the lower the payment, but the more you will pay in interest over the life of the loan.
Conventional fixed-rate mortgages have underwriting requirements established by Freddie Mac and Fannie Mae, and require certain down-payment and debt-to-equity ratios to qualify. Fixed-rate loans are especially attractive to buyers who plan to stay in their home for more than a few years.
ADJUSTABLE RATE LOANS
With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and payments go up or down accordingly. Rates are tied to an index that reflects the cost of money at any given point in time. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Adjustable rate loans are attractive for buyers who expect to be in the home for a short period of time.
Advantages of Adjustable Rate Mortgages
ARMs usually have a lower initial interest rate and a lower initial monthly payment. The reduced payment means you can qualify for a higher priced home. If interest rates go down, your payment will go down. If you plan to live in the home for a short period of time, or plan to refinance, the eventual rate adjustment may not apply.
Disadvantages of Adjustable Rate Mortgages
When the initial fixed period expires, your monthly payments can increase if interest rates go up. Since nobody can predict what real estate values and interest rates will be years in advance, it may be difficult or impossible to refinance in the future. If you seek certainty, stability and peace of mind, then an ARM might not be the right choice.
The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have lower down payments, and have relatively easier requirements than conventional fixed-rate mortgages. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program! Learn more about FHA Loans…
The Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!
U.S. Department of Veterans Affairs guarantees loans made by approved lenders such as Wells Fargo, Bank of America and others. The VA loan program is for current or former members of the U.S. armed forces, or the current or surviving spouse of one.Since VA loans are guaranteed by the government, lenders are protected against loss. This guarantee allows lenders to offer loans with little or no money down and at favorable financing terms. Learn more VA loans…
LOCAL HOMEBUYING PROGRAM
There are often many state and local programs available. These programs offer down-payment assistance and programs for local home ownership. Learn more about these local programs, recommended lenders, and other finance options by contacting us today!