InsightsFrenzy.com | Discover Insightful Content

4 Types of Home Loans You Must Know About

4 Types of Home Loans You Must Know About

Managing the finances to buy a new house can be a bit worrisome. With multiple options in the market, choosing a home loan for a house can be taxing. It is better if first-time homebuyers are aware of the various types of home loans that are on offer.

Conventional home loans/mortgages : These home loans are not insured by the federal government.

4 Types of Home Loans You Must Know About

The interest rates are higher for conventional loans, but the overall borrowing costs are lower than other types of home loans. This type of loan can be used to buy a primary home, a second home, or even an investment property.

Jumbo home loans/mortgages : These are similar to conventional loans, except they have non-conforming limits. The home prices are more than the federal loan limits. With jumbo home loans, home buyers can borrow more money to buy a high-end house. Also, interest rates tend to be competitive when compared to other types of conventional loans.

Government-insured home loans/mortgages : These loans are offered by the Federal Housing Administration (FHA loans, U.S. Department of Agriculture (USDA loans), and the U.S. Department of Veterans Affairs (VA loans). These loans are useful when a homebuyer does not qualify for a conventional loan or homebuyers who have low cash savings or low credit scores. The credit requirements are not very stringent. Moreover, there is no requirement for a large down payment.

Fixed-rate home loans/mortgages : Usually available in terms of 15, 20, or 30 years, fixed-rate mortgages have the same interest rate over the entire lifetime of the loan. Also, the monthly principal remains the same. This allows homebuyers to have precise planning of their finances. Homebuyers who plan to live in a house for a minimum of seven to 10 years can find fixed-rate mortgages useful and stable.

Disclaimer:

The information available on this website is a compilation of research, available data, expert advice, and statistics. However, the information in the articles may vary depending on what specific individuals or financial institutions will have to offer. The information on the website may not remain relevant due to changing financial scenarios; and so, we would like to inform readers that we are not accountable for varying opinions or inaccuracies. The ideas and suggestions covered on the website are solely those of the website teams, and it is recommended that advice from a financial professional be considered before making any decisions.

Popular Articles

4 Simple Ways In Which You Can Finance Your Manufactured Home

4 simple ways in which you can finance your manufactured home Today, young people are attracted to the concept of modular houses and manufactured homes. You cannot blame them as manufactured homes are much easier to buy, easily customizable, and are low maintenance.

4 Things To Keep In Mind Before You Buy A Manufactured Home

4 things to keep in mind before you buy a manufactured home Today, many young home buyers are seriously thinking about manufactured homes either because they are having a tough time paying their student loans and cannot afford regular houses, or because they want to downsize to a smaller home.

How to qualify for a reverse mortgage

A reverse mortgage provides the elderly access to equity in their homes and supplements their income. With its flexible repayment option, it gives homeowners more control over their money. However, the government has laid out strict rules and guidelines concerning reverse mortgage eligibility criteria.

How to get small business loans

Traditional banks, as well as credit unions, have changed their standards of loan lending, which has made it a bit difficult for small business owners to get funds. If you are a small business owner, you should be aware of the factors which determine your chances of landing a loan for your company.

Frequently Asked Questions On Loans

Frequently asked questions on loans Loans help an individual make an immediate purchase of items such as automobiles and electronics, plan for a second home, a marriage, or further studies.

Ways to Buy a Home on Credit and Things to Consider

Homeownership is a dream for many, but the constant increase in property rates is the primary challenge to overcome here. To do that, one may have to rely on loans and other financing options to buy a home.