Shopping for a home loan can be a complicated matter if you are not sure where to start. It is a good idea to get to know a little bit about the different types of loans before you get your search started. Using this information you can decide which loan will be best for you.
Government Loans are the first type that, believe it or not, many people are not aware of. The first type of government loan is FHA or Federal Housing Administration. This type of loan is mainly for those who need assistance with buying a home. This loan also carries a low down payment.
VA or Department of Veteran Affairs is another government loan. VA works with people who have either served in the military, are currently in the military, or families of military personnel. Just like with FHA, the down payments are often low, but with certain qualifications, there can be no down payment at all.
Adjustable rate mortgage is next. With this loan, the interest rate can fluctuate because of the current market value. While your mortgage rate may be low at first, this type of loan has the potential to increase over the life of the loan. Many will have a cap placed on the rates.
Lastly, fixed-rate mortgage is a common type that many home buyers choose. The interest rate on the loan will remain the same the entire time. However, you should keep in mind that your regular monthly mortgage payment can increase.
These are just a few of the types of mortgages that are available. Talk to your lender to find which type of loan is best for you. Differences in loans can vary depending on your income, where the house is located, the amount and type of interest, the amount of downpayment required, and more.
