Types of Agents
How to Select an Agent
Prequalified or Pre-Approved
7 Reasons to buy a home
Moving with Teenagers
How to Find a Home
50 "Things To Watch"
when viewing a home
8 Types of Loans You Should Know
What is a Sales Contract
Finding Quality Inspectors
10 Ways to Ascertain a Down Payment
How Lenders Approve Loan Applicants
Definitions of Closing Costs
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-8 Types of Loans You
Should Know About-
Here are 8 different ways you could borrow the money
for the home of your dreams.
Conventional Mortgage - Fixed rate loan from a commercial
lender for a term of 15, 20 or 30 years. Payments, interest rates,
and term are locked at initiation of contract. Requires PMI (Private
Mortgage Insurance) with less than 20% down.
Adjustable Rate Mortgage(ARM) - These
mortgages are similar in term to the conventional mortgages. These
mortgages adjust up or down on each anniversary. After the initial
term the interest rate fluctuates periodically according to financial
markets. There are usually caps on the interest rates built into the
contract. Adjustments are on the unpaid principal balance.
Federal Housing Authority Loan- The Federal
Housing Authority (FHA) insures loans for lenders. This allows lenders
to justify offering larger loans with smaller down payments. Maximum
loan amounts vary per Colorado County.
Veteran Affairs Loans- The Department
of Veterans Affairs provides guaranteed loans for qualified veterans
and servicemen. These loans allow the qualifier to offer little or
no down payment for the loan. These loans are subject to the VA mortgage
fee depending on the size of the down payment. The VA mortgage funding
fee is usually equal to 2% of the loan amount (1st time use). The
VA funding fee may be waived for disabled veterans.
Assumable Mortgage- Simply take over the
existing mortgage. The most common assumable mortgages are FHA, VA,
or ARM mortgages. You take the current contract, with specified payments,
interest rates, and term remaining. The equity difference is made
up in the down payment. Assumable mortgages must be either qualifying
or non-qualifying mortgages.
Buy Down-Mortgage - Involves paying up-front
the interest over a specific periond of time, thereby having a lower
payment during the specified term of the buy down.
Hybrid Loan- 30 year loan that is identical
to an ARM loan except that the interest rate is changed once over
the term. The first step is usually 1, 5, 7, or 10 years of the term.
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