Home Loan Programs: Which Is Best For You?

by: Chris Lontok

Scouting for a house is a very exciting moment because becoming a home-owner is a great privilege for most Americans. Renting is just not the same as having your own home. For many Americans, full payment for a house is a great feat, which is why there are so many home loan programs available for aspiring home-owners. Now, it's only a matter of choosing the right home loan program that is appropriate for your financial capacity. So here are a few tips for beginners in the line of home buying and for current home owners.

How much can you really afford? Your capacity to pay your loans and mortgages depends on specific factors like your income, credit rating, down payment, interest rates, and current monthly expenses. For those who have very little saved-up, you can try a 95%-100% financing. If you prefer 50% financing, make sure you're comfortable with the monthly down payment so you won't get into any trouble.

Shop for Loans. Do your homework! Compare interests and mortgage rates of available lenders. Consider getting pre-approved for a loan or use your charms to negotiate for a better deal. Most lenders ask for 20% of the purchase price as down payment but they can go as low as 5% on conventional loans.

FHA loans are highly recommended by most loan counselors. FHA loan or the Federal Housing Administration loan has been around since 1934. This is ideal for first time home buyers because FHA loans require low down payment, closing cost, and your credit score doesn't have to be too high. The FHA also offers Reverse Mortgage programs for senior citizens with low loan balance, converting a potion of their equity to cash.

You can also explore "no payment" loans like a VA loan. This type of loan is ideal for veterans and does not require you to have a PMI. A VA loan can also be used to purchase a house or make repairs and renovations in your current house.

Other home loan options available are USDA loan, 203k loan, and Rehab loan. USDA loans are approved based on your location and income because it is ideal for rural housing. The 203K loan, on the other hand, is a type of loan that can help you finance home repairs and upgrades. It is also offered by the FHA. The Rehab loan is relatively similar but offers higher interest rates compared to other loans.

Be in-tune with current mortgage rates and interest rates. You should be updated with ever changing rates. Apply for loans when there is a low mortgage rate trend. Only agree on interest rates you're financially capable with and remember not to get too excited with the idea of buying a house. Use a loan calculator prior to getting in touch with a lender so you're not left in the dark of mortgage and loan costs. Loan calculators are available in the internet so it shouldn't be too hard.

Consider refinancing. Refinancing is a common option for a home mortgage. Applying for a refinancing program can lower your interest rates and monthly payment. You can also pay off debts or extend your repayment time. But one valuable advantage of getting refinanced is that you reduce risks with existing loans by stabilizing your interest rates even if mortgage prices shift up and down.

Marimark Mortgage LLC offers helpful tips and loan services suitable for all your needs. They provide services for the states Virginia and Florida.