If you are planning to move into a new home, the chances are that you might also be looking for a loan to finance your move. These days, getting a home loan is not all about getting a mortgage; there are a variety of home loans that are worth looking at. Some variables such as neighborhood, type of home, repayment period can make some loan types more suitable than others. That said, here are some home loan options worth looking at.
This is one of the most common types of loan advanced to individuals planning to buy a home. One of the main distinguishing element about fixed-rate mortgages is that you pay fixed installments and the loan amount is subjected to a fixed interest rate. In this regard, this loan is highly preferred by property owners who love predictability and do who intend to stay in a single home for a considerable chunk of their life.
These types of loan are known for their adjustable rates. Thus, if the national interest rates keep fluctuating, you should be ready to adjust your monthly premiums accordingly. One good thing about these loans is that they attract relatively lower interest rates than fixed-rate loans. These loans are perfect for individuals with good credit scores as they enjoy very low interest rates. They are also useful for individuals who keep moving and do not desire to wait until the repayment period is over.
If you are currently servicing a mortgage and you would want to take a second loan while before selling your previous home, you should take a bridge loan. Lenders who offer bridge loans, also known as repeat financing, wrap your current and new mortgage together. Once you can sell your previous home, you settle the mortgage and refinance. This loan option is given to homeowners with a good credit score and low debt-to-income ratio who wish to transition between two homes.
The federal housing association (FHA) loan is advanced to individuals with meager saving than those required for a down payment. Individuals applying for FHA loans are expected to make a down payment of 20% of the value of their home. It is worth noting that these loans also come with some caveats such as a maximum loan amount. The rates are typically fixed, which implies that they do not provide much flexibility in terms of ownership and repayment.