Types of Agents
How to Select an Agent
Prequalified or Pre-Approved
7 Reasons to buy a home
Moving with Teenagers
How to Find a Home
50 "Things To Watch"
when viewing a home
9
Types of Loans You Should Know
What is a Sales Contract
Finding Quality Inspectors
10 Ways to Ascertain a Down Payment
How Lenders Approve Loan Applicants
Definitions of Closing Costs
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-8 Types of Loans
You Should Know About-
Here are 8 different ways you could borrow the
money for the home of your dreams.
Conventional Mortgage - Fixed rate loan from
a commercial lender for a term of 15, 20 or 30 years. Payments,
interest rates, and term are locked at initiation of contract.
Requires PMI (Private Mortgage Insurance) with less than 20%
down.
Adjustable Rate Mortgage(ARM) - These
mortgages are similar in term to the conventional mortgages.
These mortgages adjust up or down on each anniversary. After
the initial term the interest rate fluctuates periodically according
to financial markets. There are usually caps on the interest
rates built into the contract. Adjustments are on the unpaid
principal balance.
Federal Housing Authority Loan- The
Federal Housing Authority (FHA) insures loans for lenders. This
allows lenders to justify offering larger loans with smaller
down payments. Maximum loan amounts vary per Colorado County.
Veteran Affairs Loans- The Department
of Veterans Affairs provides guaranteed loans for qualified
veterans and servicemen. These loans allow the qualifier to
offer little or no down payment for the loan. These loans are
subject to the VA mortgage fee depending on the size of the
down payment. The VA mortgage funding fee is usually equal to
2% of the loan amount (1st time use). The VA funding fee may
be waived for disabled veterans.
Assumable Mortgage- Simply take
over the existing mortgage. The most common assumable mortgages
are FHA, VA, or ARM mortgages. You take the current contract,
with specified payments, interest rates, and term remaining.
The equity difference is made up in the down payment. Assumable
mortgages must be either qualifying or non-qualifying mortgages.
Buy Down-Mortgage - Involves paying
up-front the interest over a specific periond of time, thereby
having a lower payment during the specified term of the buy
down.
Hybrid Loan- 30 year loan that is
identical to an ARM loan except that the interest rate is changed
once over the term. The first step is usually 1, 5, 7, or 10
years of the term. |
