When looking for the perfect home to purchase, chances are you’ve probably done some research into the various types of
Fixed-rate loans are the most common type of home loan available. As the name implies, a fixed-rate loan is for a set interest rate and monthly payment for the lifetime of the loan—typically 15 or 30 years.
Right for: Fixed-rate loans are right for those who plan on staying in the home for a long
Adjustable-rate loans generally offer interest rates that are lower than what you’ll get with a fixed-rate loan, but only for a period of time, generally 5-10 years. After that time period, your rate and monthly payments will adjust, typically once a year, corresponding to what the current interest rates are. If interest rates go up, so will your monthly payment. The same applies if rates go down.
Right for: Adjustable-rate loans are right for those who have low credit scores. Typically, individuals who have lower credit scores can’t qualify for good interest rates with a fixed-rate mortgage. Therefore, an adjustable-rate lowers the interest just enough, making
Most home loans require a down payment of at least 20% of the purchase price of the home. With a Federal Housing Administration (FHA) Loan, you can have as little as 3.5% for a down payment.
VA Loans are for those who have served in the United States
Right for: A VA loan is right for veterans who have served over 90 days consecutively during wartime, or 180 days during peacetime, or a total of 6 years in the reserves. There are some strict requirements established by the VA for home loans, regarding the type of home you can purchase. The home must be used as your primary
USDA Rural Development loans are intended for those who are living in rural areas. With a USDA
Right for: USDA loans are right for individuals and families who are living in rural areas and struggling financially. To be eligible for a USDA loan, your debt cannot exceed your income by more than 41%, and you will be required to purchase mortgage insurance.
A Bridge loan, also known as a gap loan, or “repeat financing”, is an excellent option for those who are purchasing a new home prior to selling their current home. As part of a bridge loan, lenders will wrap both the current and new mortgage into one payment until the current home is sold. When the current home sells, you’ll pay off that home’s mortgage and refinance your new home’s mortgage.
Right for: Bridge loans are intended for homeowners who have excellent credit and have a low debt-to-income ratio. The other catch is, in order to be eligible for a bridge loan, homeowners won’t have to finance more than 80% of both homes’ combined values. If you meet both of these requirements, and applying for a bridge loan can be an easy way to transition between homes.
To learn more about the different home-loans available, and to learn which type you are eligible for, contact Geneva Financial, LLC today! We are here to help you find the right home loan for you and get you into the home of your dreams!