Home Loan Facts for Aspiring and Present Home Owners in Florida and Virginia

by: Chris Lontok

FHA Loans

An FHA loan is a federal assistance mortgage loan insured by the Federal Housing Administration of the United States. This type of loan is ideal for low income families of persons who want to buy a house but can't afford to do so in reality. The loan has served many people since the Great Depression of the 1930s and has now evolved into an option for people who cannot afford a down payment or do not qualify for a Private Mortgage Insurance (PMI).

An important note to remember is that FHA loan does not make loans, but instead insures loans made by private lenders. To avail of this loan, you first need to contact one or several lenders or mortgage brokers to find out if they originate FHA loans. This will allow you to survey rates which will be amenable for you. Next step would be to have your debt to income ration checked by your chosen lender so they can recommend what you'll be able to afford.

Fixed Interest Rate Loan

This loan provides fixed interest rates for the entire span of the loan. Marimark Mortgage, Tampa, FL provides 30, 25, 20, 15, and 10 year amortization period for the loan. Some companies, however, have added 40 and 45 years but take note that the longer your amortization period, the higher your interest rates. This type of loan is suitable for those who want a fixed interest rate for their home, those who plan to stay in one house for a long period of time, and those who want to build equity for their house.

VA Loans

VA loans are designed to help American veterans and their families purchase properties without any down payment. In a purchase, the borrower can loan up to 100% of the price or the reasonable value of the home. The loan also applies for two types of veterans—regular military and reserves or national guard. The funding fee for regular military is generally smaller than the latter, with 2.15% for first time general military veterans and 2.4% for reserves. The VA and FHA loan are equivalent to the PMI home loan program. An equivalent for this loan for non-military individuals is the USDA loan, which also has zero down payment requirement. But it is only apt for those who wish to live within rural areas.

Reverse Mortgages

Reverse mortgage is specifically for American senior citizens 62 years and over. It is for those who have equity in their homes and have little or no mortgage. The idea of this whole loan program is for the owner of the house to receive a monthly amount based on his or her accumulated equity. The borrowed amount will not be paid up until the owner decides to sell the house, moves residence, or passes away. You can also choose to have fixed interest rates. You don't have to worry about the lender taking the property if you outlive the loan nor should you be forced to sell your house to pay the balance.

Your other options

According to current mortgage rate statistics for 2009, mortgage rates and interests rates are deemed to steadily drop until the end of the year. This means it is a perfect time for present homeowners to reassess their loan schemes. Since interests rates have dropped by two points this year, refinancing is one recommendable step for present homeowners to take. Refinancing will allow you to lower your mortgage rates and at the same time, have the chance to “cash-out” to go for a vacation or remodel your home.

The 203k loan and rehab loans are options for those who want home repair support. It's ideal for the rehabilitation of single family properties.

You can get the help of a loan calculator for a quotation or estimate of payment cost, interest rates and mortgage rates.