Every person has a dream of buying a home whether they’re a young couple, couple starting a family or a senior entering retirement. Buying a home is a huge financial commitment and important milestone for many people. However, most prices for homes on the market are very expensive for homebuyers especially seniors. Finding the right mortgage loan is just as important as finding the right type home.
How Do Mortgages Work?
When you take out a mortgage, you can borrow money from a bank or Nationwide Home Loans to buy your home. A mortgage is a secured loan with your home as collateral, so the lender will hold the title to the property until the loan is paid in full. You will make payments on the loan each month, including interest, until it is paid off. After you pay off the mortgage, the lender will give you the title to the property, and you’ll own your home outright. When you choose a mortgage, you have four major decisions to make: the lender, loan type, loan term and interest rate type.
Types of Mortgage Loans
There are two major types of mortgage loans: federal housing administration and conventional. Federal Housing Administration mortgage programs offer guarantees to lenders that reduce their risk and can make it easier for borrowers to qualify for a mortgage. Conventional loans do not offer the same guarantees but may have lower interest rates.
Federal Housing Administration
A Hallandale Beach FHA Loans is a mortgage that’s insured by the Federal Housing Administration (FHA). The FHA is a federal government agency within the US Department of Housing and Urban Development, which makes it easier for homebuyers to qualify for mortgages. We know first-hand the FHA doesn’t lend money but instead, it ensures mortgages and reimburses Nationwide Home Loan lenders if borrowers default on the loan.
FHA plays a significant role in helping low- to moderate-income families qualify for Hallandale Beach Reverse mortgages. FHA assists first-time buyers and others who would not qualify for a conventional loan, by providing mortgage insurance to private lenders. The FHA program was created in response to the rash of foreclosures and defaults that happened in the 1930s. The program was created to provide mortgage lenders with adequate insurance and to help stimulate the housing market by making loans accessible and affordable for people with than stellar credit or a low-down payment.
When it comes to a conventional loan, the federal government doesn’t guarantee or ensure it and it conforms to the limits stipulated by Fannie Mae and Freddie Mac. A conventional mortgage allows you do as you wish with the property. For instance, you can function it into summer or winter vacation home, live in it, or turn it into a rental.
Conventional mortgage Nationwide home loan lenders typically require a down payment from 5 to 20 percent, though some offer loans with a down payment as low as 3 percent, according to the Consumer Financial Protection Bureau. If you have a down payment of less than 20 percent, your lender will likely require you to buy private mortgage insurance, which pays the lender if you default.
Reverse Mortgage Home Loans
The reverse mortgage loan can be a great option for seniors. To be a good candidate for this type of mortgage, you must be at least 62 years of age along with having equity in the home. You must also not have any plans to move, be able to afford to maintain their home and not want to keep the home in the family when it is time for them to move. The money received from this type of Hallandale Beach Home Loans will not affect social security payments or Medicare benefits, and it can be used to supplement the income, pay medical bills, pay for remodel or pay for travel expenses. When it comes to a reverse mortgage loan, you should expect to pay higher interest rates and fees.
Secure your financial freedom with a reverse mortgage loan!
If you are close to retirement, you can ensure your financial freedom with a reverse mortgage loan. With this being said, you need to research it to ensure it is a good fit for you. After you have researched it, you will then need to find the best possible lender. A reverse mortgage loan is not a good solution for all homeowners. To qualify for this type of mortgage, you will need to meet the following requirements:
- Be at least 62 years of age
- Have equity in the home
- Be current on all property taxes
- Have zero liens on the property
The money received from the reverse mortgage loan can be used however the homeowner chooses. It can be used to pay medical bills, home improvements, traveling or supplementing income. The payments received will not affect Social Security benefits or Medicare benefits.
Once you have verified, you are a good candidate you will be one step closer to financial freedom with a reverse mortgage loan.