What Type Of Mortgage Loan Is Right For You?
By [https://EzineArticles.com/expert/Charley_Smith/78045]Charley Smith
Homebuyers and homeowners need to decide which home Mortgage loan is right for them. Then, the next step in getting a mortgage loan is to submit an application ( Uniform Residential Loan Application ). Although we try to make the loan simple and easy for you, getting a mortgage loan is not an insignificant process.
Below is a short synopsis of some loan types that are currently available.
CONVENTIONAL OR CONFORMING MORTGAGE Loans are the most common types of mortgages. These include a fixed rate mortgage loan which is the most commonly sought of the various loan programs. If your mortgage loan is conforming, you will likely have an easier time finding a lender than if the loan is non-conforming. For conforming mortgage loans, it does not matter whether the mortgage loan is an adjustable rate mortgage or a fixed-rate loan. We find that more borrowers are choosing fixed mortgage rate than other loan products.
Conventional mortgage loans come with several lives. The most common life or term of a
mortgage loan is 30 years. The one major benefit of a 30 year home mortgage loan is that one pays lower monthly payments over its life. 30 year mortgage loans are available for Conventional, Jumbo, FHA and VA Loans. A 15 year mortgage loan is usually the least expensive way to go, but only for those who can afford the larger monthly payments. 15 year mortgage loans are available for Conventional, Jumbo, FHA and VA Loans. Remember that you will pay more interest on a 30 year loan, but your monthly payments are lower. For 15 year mortgage loans your monthly payments are higher, but you pay more principal and less interest. New 40 year mortgage loans are available and are some of the the newest programs used to finance a residential purchase. 40 year mortgage loans are available in both Conventional and Jumbo. If you are a 40 year mortgage borrower, you can expect to pay more interest over the life of the loan.
A Fixed Rate Mortgage Loan is a type of loan where the interest rate remains fixed
over life of the loan. Whereas a Variable Rate Mortgage will fluctuate over the life
of the loan. More specifically the Adjustable-Rate Mortgage loan is a loan that has a
fluctuating interest rate. First time homebuyers may take a risk on a variable rate for qualification purposes, but this should be refinanced to a fixed rate as soon as possible.
A Balloon Mortgage loan is a short-term loan that contains some risk for the borrower. Balloon mortgages can help you get into a mortgage loan, but again should be financed into a more reliable or stable payment product as soon as financially feasible. The Balloon Mortgage should be well thought out with a plan in place when getting this product. For example, you may plan on being in the home for only three years.
Despite the bad rap Sub-Prime Mortgage loans are getting as of late, the market for this kind of mortgage loan is still active, viable and necessary. Subprime loans will be here for the duration, but because they are not government backed, stricter approval requirements will most likely occur.
Refinance Mortgage loans are popular and can help to increase your monthly disposable income. But more importantly, you should refinance only when you are looking to lower the interest rate of your mortgage. The loan process for refinancing your mortgage loan is easier and faster then when you received the first loan to purchase your home. Because closing costs and points are collected each and every time a mortgage loan is closed, it is generally not a good idea to refinance often. Wait, but stay regularly informed on the interest rates and when they are attractive enough, do it and act fast to lock the rate.
A Fixed Rate Second Mortgage loan is perfect for those financial moments such as home improvements, college tuition, or other large expenses. A Second Mortgage loan is a mortgage granted only when there is a first mortgage registered against the property. This Second Mortgage loan is one that is secured by the equity in your home. Typically, you can expect the interest rate on the second mortgage loan to be higher than the interest rate of the first loan.
An Interest Only Mortgage loan is not the right choice for everyone, but it can be very effective choice for some individuals. This is yet another loan that must be thought out carefully. Consider the amount of time that you will be in the home. You take a calculated risk that property values will increase by the time you sell and this is your monies or capital gain for your next home purchase. If plans change and you end up staying in the home longer, consider a strategy that includes a new mortgage. Again pay attention to the rates.
A Reverse mortgage loan is designed for people that are 62 years of age or older and already have a mortgage. The reverse mortgage loan is based mostly on the equity in the home. This loan type provides you a monthly income, but you are reducing your equity ownership. This is a very attractive loan product and should be seriously considered by all who qualify. It can make the twilight years more manageable.
The easiest way to qualify for a Poor Credit Mortgage loan or Bad Credit Mortgage loan is to fill out a two minute loan application. By far the easiest way to qualify for any home mortgage loan is by establishing a good credit history. Another loan vehicle available is a Bad Credit Re-Mortgage loan product and basically it's for refinancing your current loan.
Another factor when considering applying for a mortgage loan is the rate lock-in. We discuss this at length in our mortgage loan primer. Remember that getting the right mortgage loan is getting the keys to your new home. It can sometimes be difficult to determine which mortgage loan is applicable to you. How do you know which mortgage loan is right for you? In short, when considering what mortgage loan is right for you, your personal financial situation needs to be considered in full detail. Complete that first step, fill out an application, and you are on your way!
For additional information about mortgage loan types, mortgage loan products or a bad credit mortgage loan and where to apply for a Bad Credit Mortgage Loan [http://www.ezlendmortgage.com/bad-credit-mortgage-loan.html] visit [http://www.ezlendmortgage.com] a popular website providing information, tips, mortgage advice and resources including information on independent help finding the best conventional mortgage, adverse mortgage lenders, subprime mortgages, and a Refinance Mortgage Loan [http://www.ezlendmortgage.com]
Article Source: [http://EzineArticles.com/?What-Type-Of-Mortgage-Loan-Is-Right-For-You?&id=558647] What Type Of Mortgage Loan Is Right For You?
Florida Mortgage Loans
By [https://EzineArticles.com/expert/Josh_Riverside/280391]Josh Riverside
Buying a home is one of the most important investments a person can make. Most people look for a mortgage or a loan while buying a house. The Florida real estate market is currently booming with falling interest rates and easy loans, and mortgage loan lenders are offering several kinds of loans and special mortgage loans to attract customers.
A mortgage rate is the rate of interest that is charged on the loan used for buying a house or a property. Mortgage rates keep changing over a period of time. A lower mortgage rate means a lesser cost of the house and lower monthly payments. A mortgage lending company looks after all the aspects that need to be considered such as the length of the mortgage period (fifteen-years or thirty-years), the kind of interest rate (fixed or variable), and even home inspections, taxes and property appraisals. Most people do not understand the typical mortgage terminology like PMI (Private Mortgage Insurance), APR, settlement costs, points etc. In such cases, a professional mortgage company would prove to be very useful. The main factors that are considered when issuing a mortgage loan are income of the applicant and his/her credit record.
Only Florida citizens are eligible to receive Florida mortgage loans. The various kinds of mortgage loans available in Florida are: FHA (Federal Housing Administration) loans, consolidation loans, land loans, conventional loans, balloon loans and refinance mortgage loans. Mortgage loans can also be refinanced. Refinanced mortgage loans have several benefits like lower monthly payments, lower interest paid, and cash equity. There are also bad credit mortgage loans that are offered at a slightly higher rate of interest for people who have bad credit records. The most popular kind of mortgage loans in Florida is the fixed rate loans- because of their predictability. The typical term of this loan is 15 years or 30 years. The ARM (Adjustable rate mortgage) loans are also popular because the interest rate is likely to decrease sometime in the future. This is generally preferred by people who plan to sell off the home in a few years time after paying off the loan. Other kinds of special Florida Mortgage loans are: hard equity loans, interest only loans, 100% cash out refinance, construction loans, commercial mortgage loans, farmer's home loans, no PMI (Private Mortgage Insurance) loans, vacant land and acreage mortgage loans and cross- collateralization of properties.
Florida offers very competitive mortgage rates. The best way to find a good mortgage lender in Florida is to ask friends or family members for suggestions. The Internet is a great source to find good mortgage companies who are advertising extensively about good rates and terms and also best service.
Florida Mortgage Loans [http://www.WetPluto.com/Bad-Credit-Florida-Mortgage-Loans.html] provides detailed information about Florida mortgage loans, Florida commercial mortgage loans, Florida mortgage loan calculators, and more. Florida Mortgage Loans is affiliated with Florida Mortgage Broker [http://www.WetPluto.com/Florida-Home-Mortgages.html].
Benefits of a VA Home Mortgage Loan
By [https://EzineArticles.com/expert/David_G._White/570993]David G. White
When it comes to applying for a mortgage loan, there are many different types of programs. With the many different loan programs available, it is important to choose the best program for your particular mortgage needs.
One of the home mortgage programs you can choose from is a VA loan. This type of program is designed for veterans to purchase a primary residence or refinance an existing mortgage loan. Below are the many benefits to the VA home mortgages.
No Down Payment
A VA mortgage offers veteran buyers a program with a zero down payment. This means the loan will equal the sales price or the appraised value of the home. The VA mortgage loan program permits veterans with qualifying income and credit to acquire a home without a down payment towards the sales price of the home. On the other hand, Veterans do need money towards closing costs, which the seller can assist the buyer with.
VA loans allow the seller to contribute up to 4% towards the buyers closing costs. This is exceptionally important in helping a veteran purchase a new property and reducing the amount of money needed for closing. For example, if a buyer purchases a property for $100,000 the seller can contribute $4000 towards the buyers closing costs. Seller concessions can pay pre-paid items, title fees, mortgage company fees as well as the VA funding fee. The veteran is not allowed to pay for the termite report, which is generally paid by the seller.
For many veterans, VA mortgages offer the most competitive rates. VA mortgage loan rates are not tied to the credit scores the way conventional home mortgage rates are. For example, if a client has a credit score of 660, on a VA loan the rate would be the same if their credit score was 780. However, on a conventional home mortgage, the credit score of 660 compared to a 780 would see an increase in the rate.
Another big benefit in the VA home mortgage program is there is no Mortgage Insurance. Unlike Conventional mortgage loans and FHA mortgage loans, VA mortgage loans do not charge monthly mortgage insurance. This is an average savings of anywhere between $30 a month to $200 a month, depending on the size of the home loan.
Mortgage Loan Size
VA mortgages do have a set loan limit. To determine the loan limit in your area, contact your mortgage officer. For example, the Dallas - Fort Worth area VA loan limits are $417,000
With many different types of mortgage loans, it is important to understand all your options. For a veteran, VA mortgages are a great way to purchase or refinance a home. It is always important to understand the benefits of each home loan program that you qualify for and to make sure you are getting the best possible mortgage loan. Consult a mortgage professional to see which program is best for you!
David White is a [http://www.txhomeloanteam.com]home loan officer for the Texas home loan team at Prospect Mortgage. He specializes in [http://www.txhomeloanteam.com/vahomeloans.html]VA home loans and offers several different home loan programs.
Article Source: [http://EzineArticles.com/?Benefits-of-a-VA-Home-Mortgage-Loan&id=4748763] Benefits of a VA Home Mortgage Loan
The Benefits of a FHA Mortgage Loan
By [https://EzineArticles.com/expert/David_G._White/570993]David G. White
When it comes to qualifying for a home loan, there are many different types of programs available. With the many different home loan programs available, it is important to choose the best program for your particular mortgage loan needs.
One of the home programs you can choose from is a FHA mortgage. This type of program is designed for 1st time home buyers. FHA home loans can be used to purchase a primary residence or refinance an existing home loan. Below are the many benefits to the FHA program.
Reduce Down Payment
A FHA mortgage loan offers buyers a program with a lower down payment. The current minimum down payment for a FHA loan is 3.5%. The source of the funds for the down payment can also come from many different sources including a gift from a family member or church, a 401K loan or withdrawal, and any money saved up in a checking or savings account. By allowing the down payment to come from many different sources, the FHA mortgage loan program helps buyers purchase their new home.
Seller Paid Closing Cost
FHA loans also allow the seller to contribute up to 3% towards buyers closing cost. This is extremely important in assisting a client purchase a new house and reducing the amount of money needed for closing. Sellers can pay closing cost, prepaid items like taxes and home insurance as well as interest on the loan. For example, if a buyer purchases a home for $200,000, the seller can contribute $6000 towards the buyers closing cost.
Lower Mortgage Rates
For many people, FHA home mortgages offer the best rates. FHA loan rates are not tied to credit scores like the way conventional mortgage rates are. For example, if a client has a credit score of 660, the FHA home loan the rate would be same if their score was 740, but on a conventional home loan, the credit score of a 660 compared to a 740 would see an increase of about.75% to the rate.
Another benefit in the FHA mortgage loan program is the approval of mortgage insurance. FHA mortgage insurance is approved as long as the mortgage is approved. This is not the same when it comes to a conventional home loan. Many times, a home buyer can be approved for a conventional mortgage, but will not be approved for mortgage insurance. This results in the denial of the home loan, but with a FHA mortgage loan, as long as the loan is approved, mortgage insurance is approved. Also, the monthly mortgage insurance payment for a FHA mortgage is usually less than the private mortgage insurance offered on conventional home mortgage loans.
Mortgage Amount Limits
FHA home loans do have set loan limits that are established by HUD. To determine the loan limit in your area, contact your mortgage loan advisor. For example, in the Dallas - Fort Worth area, FHA loan limits are $271,050.
Finally, one of the best benefits to a FHA mortgage is the ability to do a streamline refinance. A streamline refinance is when a homeowner refinances an existing FHA mortgage loan into a new FHA mortgage loan. The streamline refinance program allows the client to refinance with limited paperwork. Though, it might be in the best interest of the client to consider a full refinance over a streamline. Consult a home loan officer to see which program is best for you!
FHA loans are a great way to refinance or purchase a home. It is important to understand the benefits of each home mortgage loan program that you are applying for and to make sure you are getting the best possible mortgage loan.
David White specializes in [http://www.txhomeloanteam.com/fhahomeloans.html]FHA home loans. He assist clients with the [http://www.txhomeloanteam.com/fhahomeloans.html]FHA mortgage loan process. David is a licensed loan officer who can do Texas home loans.
Article Source: [http://EzineArticles.com/?The-Benefits-of-a-FHA-Mortgage-Loan&id=4742936] The Benefits of a FHA Mortgage Loan
Benefits to Refinancing a Mortgage Loan
By [https://EzineArticles.com/expert/David_G._White/570993]David G. White
When many people consider refinancing a mortgage, they often wonder if they should refinance their mortgage or not. There are many reasons to refinance a property, so when considering a refinance, it is important to make sure that there is a benefit to the new mortgage loan. Without a benefit to the new home mortgage, there is no need to refinance.
Lower Monthly Mortgage Loan Payment
One of the main reasons people consider a refinance home loan is to lower the monthly payment. Refinancing can save you money per month by decreasing the loan payment. The rule of thumb is that a refinance home mortgage is beneficial if the home mortgage payment decreases by at least 5%. So, if your current mortgage loan payment is $1000, then the new home mortgage loan would need to have a payment no higher than $950. Many lenders will not approve a refinance if there is not a benefit to the new mortgage loan and many mortgage companies use the 5% rule as to determine if the new mortgage has a benefit or not.
Lower the Home Loan Term
Another reason to refinance is to lower the term. Many people will refinance from a 30-year mortgage to a 15-year mortgage in order to payoff the home mortgage loan faster. By refinancing into a 15-year loan, not only do you save money on the interest rate, but you will save money over the lifetime of the home loan. With current interest rates low, 15-year mortgages have become a common option for many homeowners.
Cash Out Mortgage Loans
For many homeowners, a cash out mortgage is a great opportunity to use the equity in their property to pay off debts, do home improvements or to just get some extra cash out. A cash out mortgage refinance can help lower total monthly debt payments by consolidating credit cards, car loans, installment loans and mortgage loans into one payment. By consolidating debts into one payment, many consumers have saves thousands per month.
A home mortgage refinance can also be used to catch up a homeowner on their escrow account or help pay off any delinquent property taxes. At times, some homeowners can get behind on their escrow accounts because property taxes and homeowner's insurance premium change yearly. If the escrow account becomes too short, many mortgage lenders will increase the month payment in order to catch up on the negative escrow account. Sometimes the increase mortgage payment is over $500. By refinancing, the homeowner has the ability to restructure the escrow account.
Also, if a homeowner is behind on property taxes, a refinance could help pay the property taxes.
Finally, it is important that when considering a refinancing home loan, that there is a benefit to the new home mortgage. Without a benefit to the new home mortgage, many mortgage lenders will not approve the loan. So whether you are looking to lower your rate, lower your monthly payment, lower your loan term or take cash out, talk to your mortgage loan consultant to see what benefits you have in refinancing.
David White is a [http://www.txhomeloanteam.com]Home Mortgage Loan Consultant with Prospect Mortgage specializing in both [http://www.txhomeloanteam.com/purchasehomeloans.html]purchase home loans and refinance home loans
Article Source: [http://EzineArticles.com/?Benefits-to-Refinancing-a-Mortgage-Loan&id=4698766] Benefits to Refinancing a Mortgage Loan
Fixed Or Adjustable - A Mortgage Loan Dilemma
By [https://EzineArticles.com/expert/Mauricio_Navarro/249320]Mauricio Navarro
Let's clear the air: Adjustable rate mortgages are not bad. Yes, they've gotten a "bad rap" over the last year because people tend to associate adjustable rate mortgages with recent housing woes plaguing the nation but the loans are not the cause of the nation's real estate crisis; misunderstanding and misusing them is. The reality is that adjustable rate mortgages can, in fact, be an excellent mortgage loan option IF you fully understand how they work. So, with that said, it's time to learn.
Who is eligible for an adjustable rate loan? As with any mortgage loan, anyone can apply. However, adjustable rate loans do tend to be more appealing to those who deal with budgeting changes well and those who don't plan on living in a specific house for more than three to five years. Why? Keep reading...
What exactly is an adjustable rate? An ARM is one of the two most popular mortgage loan types offered in the United States. As the name suggests, the mortgage loans are called adjustable because the rate of the mortgage loan changes periodically-most commonly every six months. Mortgage loan firms often abbreviate "adjustable rate mortgage" with "ARM."
How do ARM's work? The process for obtaining an ARM is the same as any other loan type. You must apply for a mortgage loan and then, based on your credit standing, a mortgage loan officer will process your information to determine which lenders are willing to fund your mortgage. In most cases, loan officers will present you with multiple home loan options-ARM and fixed-rate mortgages.
Why do people choose the adjustable rate loan type? The simple answer: The numbers associated with ARMS always look great! In fact, they're nearly too good to be true...but they are true. The interest rates are low and the monthly mortgage payments are manageable for a much larger percentage of the population than fixed rate loans.
When is an ARM a good idea? Typically, ARMs are best for homebuyers who plan on living in a home for just a few years. The reason: Most ARMs are for 5-years or less; after that time, the ARM typically converts to a higher interest fixed-rate mortgage loan. ARMs can also be a good alternative for real estate investors who cannot obtain an interest only loan for an investment property.
Though anyone can apply for an adjustable rate mortgage loan, whether it's the best type of loan is completely dependent upon the homebuyer. That's because the continuous changing of the mortgage interest rates and subsequently, the mortgage payments can be a financial stress for some homebuyers. The ARM becomes even more of a stressor once the ARM matures and the mortgage loan interest rate spikes.
So, what's the alternative to an adjustable rate mortgage? A fixed rate mortgage of course.
Like ARMs, the name says it all for fixed rate mortgages. Fixed rate mortgages maintain the same interest rate through the life of the loan and therefore, the same mortgage payments. However, there is a tradeoff for that predictability: higher interest rates. That's why those who plan to stay in a particular home for three or more years often prefer fixed rate mortgage loans.
In the end, the key to determining which type of loan is best-fixed or adjustable-is about mathematics and lifestyle. If you're on a limited budget but expect your income to increase substantially in each of the upcoming years, an adjustable rate mortgage may be the best option for getting you into a home sooner rather than later. However, if you're uncertain about if or how your income will fluctuate, it's best to play it safe and opt for a fixed rate loan. That way, your mortgage payment won't be a surprise, regardless of what the economy is doing. Of course, if you base your home mortgage loan choice on a mortgage payment that you can afford comfortably based on your current financial situation versus trying to "figure out how to make things work," either type of loan will have you in your dream home in no time.
Mauricio Navarro is CEO of International Media SAS LLC, which owns and manages LowMortgage.net - a US and Canadian website to compare mortgage [http://www.lowmortgage.net/] & receive instant quotes [http://www.lowmortgage.net/].
Article Source: [http://EzineArticles.com/?Fixed-Or-Adjustable---A-Mortgage-Loan-Dilemma&id=1575375] Fixed Or Adjustable - A Mortgage Loan Dilemma
Hot Tips For Getting The Best Mortgage Loans
By [https://EzineArticles.com/expert/Pat_Caymus/48708]Pat Caymus
A mortgage loan is one of the most basic types of loans you can get from a bank, and meets one of the most basic of human needs, namely shelter. To this end, it is not quite as demanding as getting loans geared towards other things, especially luxury items. Still, because of the sheer amount of money involved in getting a housing loan, you should do your homework first before applying for a mortgage loan to keep yourself from biting off more than you can chew. Here are a few tips to remember when considering a mortgage loan.
Shop for the House Before Applying for the Loan - like with most loans, it's best to get an idea of what you want before applying for the loan itself. That way, when you actually present your case to the one approving your loan, you can give more solid evidence of what you're intending to do with the money you're borrowing. To this end, though, you should shop within your means. Only consider houses that are within your budget, and situated within neighborhoods that are within your financial capacity as well. While mortgage loans are also available for people who are intending to finance the actual building of a house from the ground up, it's easier to get a loan when you shop for a house that's FSBO (For Sale By Owner).
Keep your Credit History and Financial Capacity in Mind - this will be a major consideration of the person approving your mortgage loan. Bad credit history ratings or unemployment are sure fire snags that will weigh heavily against your favor when applying for a mortgage loan. Make sure that you are financially stable and can back up the loan you're going for, with enough income to cover the interest rate as well as the monthly balance of the mortgage given it's deadline to finish paying it.
Use a Mortgage Loan Calculator and Consider Different Loan Packages - not all loans for mortgage are created equal. Some banks offer higher interest rates than others, and there are those that offer longer terms of payment for larger initial downpayments. Still others allow for additional payments on the mortgage aside from the monthly due and interest, and these additional payments are applied directly towards lessening the overall sum of the loan's principal. With all the different packages available, choose one that you can work well with, and to help you with your calculations download a mortgage loan calculator program from the internet. This is an invaluable tool for keeping track of your mortgage.
Consider Using an Escrow - escrow accounts work in the favor of the lending institution; as such, getting one helps improve your odds of getting a base mortgage loan approved. An escrow account is essentially a separate account that you open that handles the taxes and insurance payments on your house for you. This favors the lender somewhat because escrow accounts are tied up with your mortgage, meaning the lender gets an additional bank account in your name. However, the advantage of an escrow account for the lendee is that it acts as a buffer for the additional payments that he or she would normally have to worry about aside from mortgage. With an escrow account, all payments are sent to the lender, and they take care of the paperwork and housing related bills for you.
Consider Investment Property Financing - if, and only if, you're getting a mortgage loan to buy a house NOT to live in, but rather as an investment to resell later, you can apply for Investment Property Financing. The mortgage loan you get from this treats the property you're buying as a commodity that you will eventually be reselling. The mortgage terms for this are different and a bit more lenient than that of a regular housing loan. Still, even if you intend to live in the house you're buying, if you know that it's going to be a temporary residence that you'll be reselling in a decade or less, you should still be able to work it as an Investment Property loan rather than a straight Housing Loan.
Get Mortgage Protection Insurance - finally, be sure to get mortgage protection insurance. This will increase the monthly payments you have to make, but it has quite a few advantages. For example, if you happen to have only one primary breadwinner in the house that suddenly becomes unemployed, if the insurance policy ties in to that breadwinner as the sole person responsible for the mortgage payments, the insurance company will be liable to pay off the remainder of the mortgage off on your behalf. Tying a mortgage protection insurance plan into an escrow account helps keep things tidy, and while you may wind up paying a bit more monthly this way, the benefits far outweigh the extra cost.
Pat Caymus writes about financial and loan topics for sites such as Military Loans 101 [http://www.militaryloans101.com] and about specific types of financing including Mortgage Loans For Military Borrowers [http://www.militaryloans101.com/mortgage-loans-for-military-borrowers.html] and other loans. These and other related financial topics are designed to inform people about personal loans, home loans, and all kinds of consumer lending.
Article Source: [http://EzineArticles.com/?Hot-Tips-For-Getting-The-Best-Mortgage-Loans&id=658176] Hot Tips For Getting The Best Mortgage Loans