Struggling to learn all about mortgages? Here’s a quick mortgage guide!
A mortgage guide is very helpful when buying your first house. This guide can give you an idea of what mortgage loans can offer you and how much they cost.
You can learn from this guide the different types of loans available, their interest rates, their payback periods, and other information that you need to know before you buy your dream home.
Mortgage down payments
Mortgage down payments are normally between three (3%) and ten (20%) percent of the price of the house.
The amount of your down payment helps to determine whether a home loan is suitable for you or not.
In general, a higher down payment helps you to avoid paying extra mortgage insurance along with the loan.
When using a home mortgage guide to find the right type of home loans, you should consider the three different types of home loans.
The three types of home loans are traditional mortgages, FHA loans, and VA mortgages. Traditional mortgages refer to the more common mortgage loans that many people are familiar with. These home loans usually have fixed interest rates for the entire duration of the loan. They can range from a 15-year plan up to 30 years. Some of them can even reach 40 years and above.
There are also FHA loans or Federal Housing Administration loans. These are popular with people who are looking for new home loans because the interest rates and loan fees are less expensive than many other types of loans. This makes the new home owner feel confident about the loan process.
If you have questions about the home loans, the FHA will answer them. They have many pre-finance services as well for home buyers.
The FHA is a great option for low down payments and for first time homebuyers. Many first time homebuyers qualify for them but it is not recommended for everyone. It’s not designed for long term use, and it does not provide as much variety as some other types of mortgages.
FHA mortgages require borrowers to be at least 62 years old and to own their home for at least three years. A borrower can change to another type of plan during the life of their loan, but cannot convert back to a FHA plan.
VA loans or Veterans Affairs loans are a popular option among certain types of people. VA mortgages are backed by the United States government.
Borrowers must meet certain criteria, including owning their home for at least five years, making a down payment, and paying the entire monthly mortgage payment on time.
In order to qualify for a VA loan, borrowers must also be veteran service personnel that don’t have any other federal debt. There is also an annual exam for VA mortgages that must be passed before funding can be approved. Its terms are usually generous with the financing sometimes reaching up to a 100% in buying a house.
Lastly, consider mortgage brokers
Home mortgage loans can be confusing. It is a good idea to work with a mortgage broker to get the most accurate information possible. Home mortgage brokers have access to many lenders, so they are often able to match the best deal to the borrower.
Unlike traditional mortgage lenders, mortgage brokers work independently so they can find the best deal for you. The offer much more options than a traditional lender has.
Working with a mortgage broker can make the application process faster and easier, resulting in a hassle-free and easy experience for you.