Home Loan Rates & Information
Fixed rate mortgages: Simple interest, fully amortized mortgages, with payments
that remain the same for the full term of the loan. 30 year fixed rates and 15 year fixed rate are the most common loans,
although some lenders may offer variations such as 20 year or 10 year fixed rate mortgages.
A shorter term home loan, such as a 15
year mortgage accelerates principal reduction and cuts the interest expense, while a 30 year mortgage can provide lower payments.
Get Mortgage Quotes
Adjustable rate mortgages: The most common adjustable rate mortgages are
fully amortized 30 year mortgage loans. Mortgage rates are determined by adding an index to a
margin. The index is a financial point of reference, such as the one year treasury, which
can fluctuate. The margin is set by the lender, and
remains the same for the life of the home loan.
Lenders usually offer ARMs which are fixed for the initial 3, 5, or 7 years,
with the remaining term adjusting on a yearly basis.
FHA mortgages: Popular home loans for buying a home because of the low down payment, plus the credit and income qualifying can be easier than a conventional loan. FHA loans offer:
- Down payment as low as 3.5% of purchase price when buying a home
- Flexible FHA mortgage loan guidelines provide for lower credit scores
- Higher debt ratios allow home buyers to qualify with less income
- A non-occupant co-borrower can help a home buyer qualify for a loan
- Certain mortgage closing costs have limitations which are set by FHA
- A previous bankruptcy only needs to be discharged for two years
- Less cash reserves make it easier for a first time home buyer to qualify
- FHA allows all or part of the down payment to be a gift from close relatives
When buying a home, remember to budget enough money for closing costs and setting up an impound account, which is money collected at closing held in reserve for taxes and insurance.
|
