Finding the Right Mortgage
When selecting a home loan, it’s essential to take into account your budget, credit and other financial objectives. There are various home loan types available such as traditional conforming mortgages or government-backed ones; so make sure you select the one best suited to you.
Selecting the correct loan is critical when purchasing a home, as it will determine how much you can borrow and how much interest you’ll pay over its lifespan. But before you dive in, here are some things to consider about different loan types and what to look out for when shopping around.
Fixed-Rate Mortgages
A fixed rate mortgage is a popular choice for homeowners as it locks in your interest rate and monthly payments for the duration of the loan. However, make sure that you get an adjustable-rate mortgage that meets your needs and fits best into your situation.
Adjustable-Rate Mortgages
Variable rate mortgages (ARMs) are a popular choice for home buyers with good credit scores, as they can be adjusted up or down over time. But those marketed to people with poorer credit histories may pose additional risks to borrowers so it’s essential that you shop around and read all details before agreeing to anything.
FHA-Insured Mortgages
An FHA-insured mortgage is the perfect option for borrowers with poor credit scores or who cannot obtain conventional financing. Unlike conventional loans, FHA-insured loans allow down payments as low as 3.5%.
USDA-Insured Mortgages
USDA-insured mortgages are a great choice for rural homebuyers with lower credit scores and smaller down payments. Furthermore, USDA-insured loans provide flexible mortgage products tailored to first-time homebuyers or those who may not have much money saved up for a down payment.
Jumbo Mortgages
A jumbo mortgage is an option to a conventional loan for those looking to purchase a larger or more costly home. While these larger mortgages usually carry higher interest rates than their conventional counterparts, jumbo mortgages can be an excellent choice if you have sufficient down payment funds and other financial resources.
