With several different mortgages options, available for first time home buyers or current homeowners, it’s not always easy to know which one is right for you. When people think of mortgages, they only think of it as some sort of umbrella terms that encompasses all mortgage types and packages. However, there are distinct differences between Hallandale Beach home loan options available. Let’s look into the different types of loans.
What is a Mortgage?
A mortgage is either a government-backed or conventional loan. Government-backed mortgages are insured by agencies like the Federal Housing Administration (FHA) or the Department of Veteran Affairs (VA), as well as private lenders like your bank or another institution that is licensed to loan out money.
VA Loans are guaranteed by the U.S. Department of Veteran Affairs. Hallandale Beach VA home loans are available for veterans at competitive fixed interest rates. Some other advantages for vets include no down payment and limited closing costs. This loan type is one of the most powerful loan programs available on the market for service members. The flexible home loans are government backed which offer significant advantages to allow those that may otherwise struggle with financing for a home of their dreams.
Hallandale Beach reverse mortgages are a low-interest loan for senior home owners that use a home’s equity as collateral. This type of loan considers the percentage amount of the home’s value which is determined by the age of the youngest homeowner. The loan does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. When that happens, the estate has approximately 12 months to repay the balance of the reverse mortgage or sell the home to pay off the remaining balance. All equity will be inherited by the estate.
A traditional home loan that is required to follow the terms and conditions that are established by the guidelines of Fannie Mae and Freddie Mac. The conforming loans are equal to or less than the dollar amount established by the conforming loan limit set by the two big lenders, Freddie and Fannie. With a conforming loan you can choose from a 2 different fixed-rate mortgages. The first is a 30 year fixed mortgage, which means you have 15 years to pay off your home loan. These typically come with lower interest rates and are not that much more expensive than adjustable interest rate loans. The 15 year fixed mortgage has the advantage that you will own your home sooner, however, many people do opt for the 30 year home loan and make larger payments to be able to pay the home off within 15 years. Adjustable rate mortgages have a fluctuating interest rate over the course of the loan. The Interest rate is determined by adding a fixed number of points to the defined index. The longer you ask the lender to charge you a specific rate, the more expensive the loan. The conforming 5/1 ARM has a fixed interest rate for the first 5 years of the terms of the loan and after that, the interest rate begins to fluctuate.
The FHA is a government agency within the U.S. Department of Housing and Urban Development. Hallandale Beach FHA loans are typically for helping low to moderate income families to qualify for mortgages. The down payment for an FHA loan can be as low as 3.5% and the closing costs can be included in the mortgage amount. The FHA insures home loans against the borrower’s default to encourage lenders to offer the loans to home buyers and homeowners at more affordable rates. The minimum credit score to qualify for the FHA loan is 580.
Hallandale Beach jumbo loans is a loan amount that exceeds conforming loan limits imposed by Fannie Mae and Freddie Mac. To qualify for this type of loan you need to make sure that the home you are looking at does not exceed $453,100. A credit score of 680 is required, though if your score is lower you can still apply with a larger down payment. Expect to put down a minimum payment of 20% of the home’s value.
Choosing the right home loan for you is easy when you’re working with people you trust. Find out how we can help you get the best Hallandale Beach mortgage rates for your budget.