Buying a house can be an exciting opportunity. However, the financial aspect can be overwhelming, with many Americans reporting how stressful the process is. Selecting the right mortgage loan is vital. Homeowners that choose a home and a mortgage they can afford are more likely to stay on top of their repayments.
There are various types of mortgages to choose from. Here are three types of mortgage loans available for most home buyers today.
VA Mortgage Home Loan
Veterans or active-duty military soldiers can qualify for a VA loan. If they are a spouse of a deceased veteran, then they may also be able to qualify. Requirements are varied. There are different criteria marks used to determine who qualifies for a loan. Factors can include; if their discharge was honorable or not and how many years the individual served in the forces.
VA loans are issued by a traditional private lender and are partially guaranteed by the U.S. Department of Veterans Affairs (VA). VA loans can be used for home purchases, new construction homes, or refinancing. Most VA mortgages do not have a limit. Instead, it will depend on how much the lender is willing to loan an individual, depending on their financial profile.
To find out if you qualify for VA loans, providers such as Hero Loan offer a quick turnaround service. It allows users to find out whether or not they qualify for a VA loan in a short space of time.
A fixed-rate mortgage allows a person to pay off the mortgage over a fixed period. It will also be at a fixed rate of interest, regardless of any changes and trends that may affect the interest rate. Homebuyers have the option to choose from loans that can be paid over 15, 20 and 30 years.
Some loans can also be paid over 50 years. If the plan is to stay in the home for at least 7 – 10 years, fixed-rate mortgages offer more stability with monthly payments. This allows home buyers to be more precise with budgeting for other home expenses month to month.
Fixed-rate loans stay at one cost, but adjustable-rate mortgages have fluctuating interest rates. These can increase and decrease depending on the market conditions. Most adjustable-rate mortgages have a fixed interest rate for a few years. It is before the loan changes to a variable interest rate for the remainder of the term.
There are adjustable-rate mortgages that can cap the increase of the interest rate or monthly mortgage rate, preventing you from being in financial trouble when the loan resets. There is a certain level of risk with an adjustable-rate mortgage that you must be comfortable with before investing in one. However, if the plan is to stay in the property for only a few years, then adjustable-rate mortgages can help to save a significant amount on big interest payments.
Owning a home is one of the greatest, and expensive, assets a person can own. Researching the different types of mortgage loans available and which ones are likely to help you reach your goals.