Popular Mortgage Programs
There are many types of mortgages available to Dallas home buyers. Although the mortgage industry has changed there are still an array of mortgage programs available. Many of these mortgage programs are listed below with an explanation or description of each one. Popular Types of Mortgage Programs· Fixed Rate MortgagesThe fixed rate mortgage is one of the most sought after loans of them all. You can choose from 10-year, 15-year, 20-year-, 30-year and even 40-year fixed rate mortgages. All of which have a interest rate that stays fixed through the term of the loan and are fully amortized. · FHA MortgagesFHA mortgages are insured by the government. First-time home buyers are ideal candidates for an FHA loan because the down payment requirements are minimal and FICO scores can be lower than with other loan. In fact, many are calling FHA the new sub-prime lender. · VA MortgagesVA mortgages are also insured by the government and is available to veterans who have served in the US Military. The requirements vary depending on the year of service and whether the discharge was honorable or dishonorable. The main benefit to a VA loan is the borrower does not have to have a down payment. The loan is guaranteed by the Department of Veteran Affairs, but funded by a conventional lender. · Interest Only MortgagesThese mortgages are not really interest only, meaning the borrower pays only interest on the loan. Interest-only loans contain an option to make an interest-only payment. The option is available only for a certain period of time. These types of mortgages give you some flexibility with your payments. If you are very disciplined this type of mortgage may work well for you. If not, stick with the fixed rate mortgage. Hybrid Mortgages· Adjustable Rate MortgagesAdjustable-rate mortgages (ARM’s) have interest rates that fluctuate. It can move up or down monthly, semi-annually, annually or remain fixed for a period of time before it adjusts. · This type of mortgage consists of two loans: a first mortgage and a second mortgage. The mortgages can be adjustable-rate mortgages or fixed-rate or a combination of the two. Borrowers take out two loans when the down payment is less than 20% to avoid paying private mortgage insurance. · Mortgage Buy DownsBorrowers who want to pay a lower interest rate initially can get a mortgage with a buydown feature. The interest rate is reduced because fees are paid to lower the rate. Buyers, sellers or lenders can buy down the interest rate for the borrower. These loans are great for people who know they will be earning more money in the next one to three years.Specialty Mortgages· Streamline MortgagesLike the 203K loan program, FHA has another program that provides funds to a borrower to fix-up a home by rolling the repair cost into one loan. The dollar limits for repair work are lower on a Streamlined-K loan, but it requires less paperwork and is easier to obtain than a 203K. · Reverse Mortgages Reverse mortgage are available to any person over the age of 62 who has enough equity. Instead of making monthly payments to the lender, the lender makes monthly payments to the borrower for as long as the borrower resides in the home. The interest rate can be fixed or adjustable. This may be a great way for seniors to support themselves for many years.· Equity Mortgages Equity loans are second in position and junior to the existing first mortgage. Borrowers take out equity loans to receive cash. The loans can be adjustable, fixed or a line of credit from which the borrower can draw funds as needed.
For most buyers, unless they are in a position to pay all cash for a Dallas Home, mortgage financing is a necessity. Choose the mortgage program that you are comfortable with, a payment you know you can comfortably afford so you Dallas Home doesn’t become a . You also do not want to end up in a position where you have to sell your Dallas Home to one of those companies that can only offer you 50 to 60 cents on the dollar.
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