Aside from common one-time payments, there are several fees every home buyer should be aware of when beginning their home buying process. 

Read this post to learn about the upfront and recurring fees you should consider when purchasing a home to prepare yourself financially. 

Upfront, One-Time Fees

The most common fees related to the home purchasing process are those applied during closing. Closing cost fees are payments you make to your lender to process your home purchase. 

The total closing costs you’ll pay depend on a variety of factors. Factors like the state you live in, the loan type, and the loan amount all affect the closing cost fees you will be responsible for paying. 

Check out following ClosingCorp to see a breakdown of average closing costs by state. 

ClosingCorp report

Closing costs consist of several one-time, upfront payments, including:

Application Fees

Application fees will vary by lender and loan type. Often these fees will be used as a deposit and later applied to other costs down the road. Because some application fees are non-refundable, even if your loan application is denied, make sure you ask your lender their rules.  

Appraisal Costs

Third-party appraisal companies determine the property’s actual worth and send a formal approval document to your lender confirming the amount the lender is able to loan you. Depending on your state, appraisal costs can cost upwards of $600. 

Inspection Fees 

Some states require a separate home inspection, distinct from a home appraisal. A home inspection confirms your home is structurally safe and free from any major damage. Expect to pay up to $500 for a home inspection, depending on your home’s size and location. 

Credit Report Fee

Running a credit report is one of the first things your lender will do to determine the loan amount and interest rate that will work best for your current situation. While some lenders will charge you separately for this hard inquiry, others will cover the cost as part of the lending process. If you are responsible for paying the fee for this report, you can expect to pay up to $50 per report. 

Document Preparation & Administration Costs

Some states require home buyers to pay an attorney to prepare the documents needed to close on your home and transfer the title to your name. You may also be responsible for paying the cost of transporting any mortgage paperwork, sometimes known as courier fees. 

Additionally, you will be required to pay a title recording fee to your local municipal agency to ensure the public land ownership records reflect the change in title ownership of the home. 

Because these requirements and fees vary drastically from state to state, your best bet is to ask your realtor or lender how much you should expect to pay. 

Loan Origination Fees

While attorneys, couriers, and government employees work on several aspects of your closing paperwork, your lender will be hard at work processing and underwriting your loan. You are responsible for paying the loan origination fees that cover the time and work your lender has put in on these documents. Most lenders charge around 1% of the loan’s value for origination fees, but we recommend you ask your lender to confirm the charge. 

Lender & Owner Title Insurance

Title fees cover both you and your lender in certain situations. Lender’s title insurance ensures the bank will still receive a payment if you lose your home. This fee is obligatory at closing and can cost around $1,000.

Owner’s title insurance covers you if someone sues you, if you cannot pay for your property, or a title lien remains uncovered. This insurance is totally optional but can cost you upwards of 1% of your property’s value. 

Closing Taxes

There are several taxes you’ll be responsible for paying at the time of closing on your property, including:

• Transfer taxes paid to your local government for transferring the home’s title under your name. 
• Up to a year’s worth of property taxes may be due upon closing, depending on where you live. The amount of property tax due in this situation depends on your home’s value. 

Recurring Homeownership Fees

Now you know the one-time fees you may owe when closing on your new home purchase. The next step before you start your home buying process is calculating the recurring homeownership fees you may be responsible for paying on an annual or monthly basis.

Principal and Interest

Your principal and interest rates are determined based on the original loan amount borrowed. Depending on the home mortgage type, the payments may be divided into monthly payments. As you begin to pay off your principal amount, your monthly interest amount will also decline. 

Ask your lender to break down these costs as your purchase price, down payment, loan type, and APR will determine your monthly payment. 

Property Taxes

Every state has a minimum property tax structure as determined by the local government. These taxes are typically collected annually, but some states allow divided payments made several times throughout the year. 

Look up your local government and state property tax rate before starting your home purchasing journey. 

HOA Fees

Depending on the property type you’re interested in buying, you may be responsible for paying Home Owners Association or HOA fees. These monthly fees are collected to help pay for maintenance and repairs of common areas and buildings in your neighborhood and community. 

HOA fees can vary depending on property type and state. Ask your realtor for a copy of the HOA bylaws that may be applicable to the home you’re interested in buying to determine if you can adequately cover any related fees. 

Maintenance and Repairs

While some homes are considered turn-key and require very few upgrades, it’s likely you will need to consider repairs and maintenance fees in your monthly calculations. Landscape upkeep, safety upgrades, and property repairs can quickly drain your savings. Be realistic with your expectations! 

Once you’ve calculated these fees, you should have a better sense of how much money you’ll need for upfront closing costs and recurring payments associated with purchasing your new home. 

If you’re feeling overwhelmed with the calculations or the overall lending process, we’re here to simplify the home buying process and guide you through this important time in your life. 

contact us today

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Additionally, figuring out your budget and setting expectations during uncertain financial times adds an extra layer of exhaustion. We get it. It’s hard to know where to find the right information when there seem to be endless options. 

That’s why we’re outlining the 5 steps you can take today to remove the overwhelm from selecting a mortgage. Being prepared for the mortgage process is the best way to arm yourself with the right tools and knowledge you need to face the next few months of the home buying process.

Set Your Budget First

The first step to determining the right mortgage for you is getting clear on your budget. Regardless of the mortgage loan options available Setting a budget is the best way to narrow down your mortgage options. 

Every mortgage loan option comes with specific lending requirements and thresholds. You want to be clear on several factors before deciding the best mortgage option for you, including:

1. Do you have money saved for a down payment? If so, how much do you have saved? 
2. What is your credit score Are there steps you can take to improve it Before starting your home buying process? 
3. How much money are you comfortable paying for mortgage and principal monthly payments? 

Once you have these numbers down on paper, check out our Mortgage Calculator To determine what your monthly mortgage payment could be. If you prefer to run these numbers to figure out a home price you can afford, check out the Affordability Calculator on the same page. 

Define Realistic Expectations

It’s no secret the housing market is undergoing some major shifts due to several current events affecting housing prices and supply. This is why our next tip on beating overwhelm during the mortgage search process is setting realistic expectations. 

It’s going to take some time before the market levels out again but setting realistic expectations of the type of mortgage that works for you is a good first step. Consider the type of home you’re interested in, and then search for the financing that can help you get there. 

With many mortgage options available to home buyers today, it shouldn’t be difficult to find a mortgage loan that can accommodate your budget, credit score, and expectations. Having said this, it’s important to make a list of amenities you’re ready to forego in order to secure your non-negotiables. This is especially important if you are forced to adjust your loan expectations.

Prepare Required Documentation

The paperwork associated with the home buying process is enough to scare even the most confident buyers from applying for a mortgage loan. It can be overwhelming to educate yourself about the mortgage process, but there is one surefire way to make this journey as seamless as possible: getting organized. 

Once you’ve determined which type of loan may be the best option, you can begin preparing the necessary documentation. Most mortgage loan types require the same basic information:

• Evidence of a qualifying FICO score
• Your household income in the form of recent W-2 forms 
• Any assets that can be used to pay your mortgage

Having this information organized and prepared before you apply for a mortgage loan will help you take the overwhelm out of the process. Saving the results of your Mortgage Calculator exercise can also help frame your budget for your realtor and your lender. 

Shop Around for Pre-Approval

Don’t make the mistake of getting pre-approved by just one mortgage lender. Different lenders may offer you different loan amounts with varying fees and interest rates. Assure the best fit by working with a few lenders to get pre-approved for the best mortgage loan for your financial situation and the home you want to buy. 

Once armed with your budget, credit score, and requirements, work with different lenders to find the one that offers you the best options for you. The only way you can beat the overwhelm that comes from selecting and being approved for a mortgage loan is by understanding all your options before making a decision. 

Work with a Lending Expert

The quickest way to take the overwhelm out of finding the right mortgage for you is to work with a lending expert. Sifting through hundreds of lenders and choosing the one that’s right for you and your home buying goals only adds to the stress of buying a home. 

Working with loan experts who know the ins and outs of mortgage financing while advocating for your best interest is what we do best at Lendevity. Our team of experts explains the different rates and terms simply, ensuring you make the best decision for your unique situation. 

We offer unique mortgage loan options that are right for your financial situation and match you with lenders we know will help you achieve your home buying goals. Reach out to us today if you’re interested in beating the mortgage loan stress for good. We’ll get you a free quote, and if you’re ready to commit, we’ll get you partnered with an expert to guide you through the entire process. 

Get started now. 

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But unlike its academic counterpart, having a bad credit score doesn’t completely disqualify you from getting approved for a loan. There are certain steps anyone with bad credit can take to qualify for a loan, including finding a borrower that works with lenders with fair or bad credit, improving your credit score incrementally, and using a co-signer on your loan application. 

Keep reading to learn more. 

How Credit Affects Your Borrowing Chances

Your credit score is an indication of your financial health. Lenders use credit scores to predict the likelihood of receiving on-time payments from borrowers. Using a scoring model, companies look at several factors to determine your credit score, including:

• Payment history
• Unpaid debts
• Number of active loans
• How much credit you’re currently using
• Your collection, foreclosure, or bankruptcy history

According to the following Consumer Financial Protection Bureau (CFPB) You have many different credit scores. And, it is normal to see slightly different scores depending on the method each company uses to determine your score. 

Whether you’re looking to qualify for a home loan or personal loan, lenders will use your credit score to gauge the risk associated with providing you a loan. If you have a fair or bad credit score, lenders may feel you’re a higher risk and deny your loan application. 

If a lender approves your loan application despite your bad credit, you will likely pay a higher annual percentage rate (APR) or interest rate. 

How to Find Lenders That Work With Fair or Bad Credit

As we just discussed, having bad credit doesn’t mean you’re out of the loan game entirely. To qualify for a home loan or personal loan with fair or bad credit, you have to find lenders who work with your unique situation. 

Traditional lenders like large banks may find your bad credit score too high of a risk to approve your loan application. While you should still try your luck with larger institutions, working with smaller lenders may be your best bet. 

If you have fair or bad credit, consider applying for a home loan or personal loan through:

Credit Unions

These member-owned companies are often a great place for borrowers with fair or bad credit to apply for a loan. Typically offering more personalized services, credit unions work with borrowers of all types. You may pay a higher interest rate or APR, but you’ll find a higher likelihood of qualifying for a loan through your local credit union than larger national banks. 

Online Lenders

Today, you can find lenders who exclusively offer loans via their online platforms. These lenders often have less stringent eligibility requirements and may not be as concerned with your bad credit history as more traditional lenders. One caveat you should consider is how overwhelming finding an online lender can be. 

If you want a team to help you through the process – from finding the perfect lender to closing on your loan please reach out to usWhatever your situation, our team is committed to matching you with lenders that help reach your loan goals. 

FHA Mortgage Loan

Consider following FHA loan If you need a home loan and have bad credit. FHA loans offer flexible eligibility requirements for borrowers with bad credit. If you qualify, you may also be eligible for low down payments and low closing costs. Read our following recent blog post Types of Mortgage Loans Available to Home Buyers Here you would learn more about FHA loans.

How to Improve Your Credit Quickly

If you have a particular loan you know you want to apply for that requires a better credit score, there are some ways you can improve your score.

The first step to improving your bad credit score is to make payments on time. Paying any of your bills late has a huge impact on your credit score. In fact, your bill payment history makes up a large portion of your credit report – something lenders will definitely take into account when reviewing your loan application. 

If you have balances on any of your accounts, take steps to pay down the debt. This is the second-biggest factor companies use to calculate your credit score. It may hurt at the moment, but paying down your balances makes a huge impact on your credit score in a small amount of time. 

Finally, consider calling your credit card company and requesting a higher credit limit. This isn’t a foolproof method, but if you can get approved, you can improve your credit. By increasing your credit limit but maintaining your balance, your credit utilization goes down and your credit score goes up. But make sure you don’t use the extra credit on the card, or you’ll be in a worse situation. 

How to Apply for a Loan With Bad Credit

Finally, if you’ve exhausted all your options to qualify for a loan with bad credit, consider adding a co-signer to your application. Adding a co-signer with good credit to your loan application greatly increases your chances of being approved for a loan. Acting as a guarantor on the loan, the co-signer takes equal responsibility for paying the loan if you can’t pay your monthly payments. Adding a co-signer to your loan application can lower your overall interest rate and APR. 

Another consideration is adding collateral to your loan application. If you have an asset like a car or another home, you can offer it up as a qualifier for a loan. This gives the lender a backup plan in case you cannot make the monthly payments. Like adding a co-signer, using collateral on a home loan or personal loan can lower your interest rate and APR. 

Don’t let your bad credit keep you from qualifying for a loan. Reach out to Lendevity today to streamline your research process and find a lender willing to work with borrowers like you. 

Schedule a call with one of our team members now, or get a free quote. 

The post Can I Qualify for a Loan With Bad Credit? appeared first on Lendevity, Inc..

This post will cover 8 of the most common types of home loans you may consider before beginning your new home search. From conventional mortgage loans that allow you to pay over the course of 15 or 30 years to government-backed VA and USDA loans, there is a home loan that fits every homebuyer’s need. 

1. 30-Year Fixed-Rate Mortgage – The most popular home loan! 

A 30-year fixed-rate mortgage is one of the most common home loans available to homebuyers. This conventional home loan offers a fixed interest rate for the 30-year duration of the loan. By setting the interest rate for the duration of the loan, you pay a set rate for both your monthly mortgage payment and your interest rate. 

Knowing the exact amount you will pay every month offers consistency and stability to your monthly expenses. You won’t have to worry about a changing economy or fluctuating interest rates. Additionally, you may have an easier time approaching mortgage lenders and qualifying for a 30-year fixed-rate mortgage as it’s one of the most common home loans available.

2. 15-Year Fixed-Rate Mortgage Loan

A 15-year fixed-rate mortgage is another common home loan you may consider if you’re interested in lower interest payments. This conventional loan shares the same benefits as the 30-year fixed-rate mortgage. However, you should be aware that by decreasing the loan duration, you increase your monthly mortgage payment.

This type of home loan is often used by homebuyers looking to refinance their homes. If you’re not looking to refinance, but you want to pay off the loan quickly and build equity in a shorter period of time, then a 15-year fixed-rate mortgage can be a good home loan option for you. 

3. Adjustable-Rate Mortgage Loan

Adjustable-rate mortgages (ARMs) can be a good home loan choice for homebuyers. This type of home loan offers an initial fixed rate that adjusts over the duration of the loan. ARMs home loans can be set up in several ways by your lender to suit your financial situation. You may opt for a 5, 7, or 10-year fixed-rate mortgage loan with an interest rate adjusted bi-annually or annually.

For example, you may decide on a mortgage that has a fixed rate for the first five years. In this situation, the interest rate would adjust every six months or 12 months after the first five years. This type of home loan may be a great option for homebuyers looking to pay less money upfront or for those facing high-interest rates and anticipating those interest rates to lower in the next few years. 

4. Interest-Only Home Loan

Interest-only mortgage loans can be a great home loan option for homebuyers with significant cash flow and those who may not want to stay in a home long-term. This type of home loan allows you to pay only the mortgage interest for the first 5 or 10 years of the loan. 

Interest-only loans can be highly customized to your preferences, including choosing a fixed-rate or adjustable-rate loan. Keep in mind these types of home loans require a borrower to demonstrate they have adequate financial assets before they can be approved. 

5. Jumbo Mortgage Loan

Jumbo mortgage loans are the most common type of non-conforming loan. This type of home loan does not conform to the loan limits set by the Federal Housing Finance Agency (FHFA). The FHFA sets annual baseline loan limits for single-family homes determined by the annual Housing Price Index Report. 

If you’re interested in applying for a jumbo home loan, check out this year’s conforming loan limit

Because jumbo loans are not government-backed and do not conform to federal loan limits, eligibility requirements are often more rigid. Before asking your lender about this type of home loan, ensure you have a great credit score, a substantial down payment, and a lower debt-to-income ratio. 

6. FHA Home Loan – A Great First Time Homebuyer Loan Option

Federal Housing Administration (FHA) loans are some of the most sought-after loans for first-time or lower-income homebuyers. The government-backed loans offer looser income, credit, and down payment requirements that allow homebuyers access to secure and affordable home loans. 

Unlike other government-backed loans, FHA loans do not require homebuyers to be active military personnel or require the home to be located in rural areas. FHA home loans are a great option for new home buyers and those less likely to have substantial savings for a down payment. Private mortgage firms, banks, and credit unions offer FHA loans and are easily accessible to most home buyers. 

7. VA Home Loan

Home loans offered by the Department of Veterans Affairs, commonly known as VA loans, are a type of home loan offered exclusively to veterans and active military personnel. Active-duty servicemembers, eligible spouses of veterans, and World War II allied veterans are eligible to apply for VA-backed home loans with less strict credit, income, and down payment requirements. 

Before asking your lender if you’re eligible for a VA home loan, ensure you have prepared all required documentation. In addition to the typical documents like income and credit, you want to prepare proof of military service, the type of home you’re interested in purchasing, and evidence of adequate assets to pay the lending fee. 

8. USDA Home Loan

The Department of Agriculture offers home loans to low or moderate-income homebuyers interested in purchasing a home in specific suburban or rural areas. The agency backs this type of home loan through its Rural Development Guaranteed Housing Development program. 

You’ll be pleased to know there are less strict income, credit, and down payment requirements to satisfy if you are interested in purchasing a home in an eligible rural or suburban area. 

If any of these eight home loans interest you, contact us today. We review your income, credit history, and down payment options to guide you through the homebuying process. Lendevity is committed to offering our customers the best deal, terms, and home buying experience. 

Get started now!

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Finding the right type of mortgage loans for home buyers requires expert mortgage advisors certified to work with borrowers with differing needs. The good news is Lendevity understands how frustrating the process can be. Learn more about who we are and our mission here. 

That’s why we strive to getting mortgage loans for home buyers process as effortless as possible for our clients. With over 18 years of expert home loan experience, we know the ins and outs of the industry. We ensure we get the home mortgage loan that fits your unique set of circumstances. 

This post will help you learn the different mortgage loans you may qualify for. Keep reading to learn which mortgage loan may be right for you. 

In this guide, you will learn about:

1. Conventional Loans 
2. Government-Backed Loans
3. Fixed-Rate Loans
4. Adjustable-Rate Loans
5. Other Mortgage Loans

Conventional Mortgage Loans 

Conventional loans are types of mortgage loans for home buyers that the federal government doesn’t back. These loans are available to you as a homebuyer from private lenders including banks, mortgage firms, and credit unions. 

There are two main Conventional Loan types: Conforming and Non-Conforming. Let’s dive into the differences between these loan types.

Conforming Conventional Mortgage Loans

The Federal Housing Finance Agency (FHFA) sets annual baseline loan limits for single-family properties. The Housing Price Index (HPI) report determines and adjusts the limit every year to reflect the average increase of home prices nationally.

Check out this year’s conforming loan limit here

Although government does not back conventional loans, conforming conventional loans must meet loan standards set by the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae). These agencies guarantee conventional loan mortgages. This means they offer stability, liquidity, and affordability needed in the housing market. 

Conforming conventional loans are typically easier to qualify for than other types of mortgage loans. Thus, making them a great option for first-time home buyers.

Consider these factors before seeking a conforming conventional loan:

1. Credit scores are an important component of every loan experience. Make sure your credit score is at least 620 before considering a conforming conventional loan. 
2. Ensure your Debt-to-Income ratio (DTI) is less than 50%. This is a measure of how much of your monthly income goes to paying off debts. If it’s more than 50%, consider paying off some debt before seeking a mortgage loan.
3. Confirm the loan you’re applying for falls within the loan limit standards set by Freddie Mac and Fannie Mae.

Non-Conforming Mortgage Loans

The name of this type of conventional loan says it all – Non-conforming Conventional Loans do not conform to the loan limits set by the FHFA. These types of mortgage loans may use underwriting standards that do not fit the guidance set by Freddie Mac and Fannie Mae and therefore are not guaranteed by these agencies. 

Jumbo loans are the most common Non-Conforming loans. Jumbo loan values vary widely by your location. For example, the FHFA sets annual home loan limits nationally, but these loan limits may increase for counties that have much higher home values. 

Non-conforming loans are inherently more risky than conforming loans because they:

• Exceed loan limit standards set by the FHFA
• Are not guaranteed by Freddie Mac or Fannie Mae
• Involve more money 

Having said all this, you should consider these factors before seeking a non-conforming conventional loan:

1. Because non-conforming loans carry more credit risk, you must ensure your credit score is 700 or above. 
2. Ensure your Debt-to-Income (DTI) ratio is less than 43%. Industry experts prefer to see this number even lower, at around 35%, before approving a non-conforming loan.
3. Save enough money to pay the down payment. Applicants for non-conforming loans must adhere to strict income and asset requirements. Traditionally, jumbo loans required a 30% down payment. While those requirements have loosened, the down payment is determined by a wide range of factors. It could be more or less than 30%. 

Government-Backed Mortgage Loan

There are three main types of government-backed mortgage loans you can apply for as a potential homebuyer: Federal Housing Administration loans, United States Department of Agriculture loans, and Department of Veterans Affairs loans. 

As their names suggest, Federal government agencies insure these loans. Because these agencies back the loans, they protect you as the lender in the event you cannot pay the loan. This significantly reduces the risk for you as the lender. You should be aware of certain requirements that differ from conventional loans.

Let’s dive into each government-backed loan to see specific requirements you may need to follow:

Feral Housing Administration Loans

Available to homebuyers since 1934, these types of mortgage loans for home buyers are accessible to most first-time homebuyers because they have looser income, credit, and down payment requirements. Unlike the other two government-backed loan types, FHA loans do not require homebuyers to be active military members or purchase a home in a particular location. 

The same lenders issue FHA loans as conforming loans – banks, private mortgage firms, and credit unions. 

Consider these factors before seeking an FHA loan:

1. Ensure your credit score is 580 or higher. If your credit score is lower than this, you may still qualify for an FHA loan, but you may need to pay up to a 10% down payment.
2. You have enough money saved to pay a 3.5% down payment. 
3. Private Mortgage Insurance (PMI) is typically a requirement for FHA loans and usually requires you to pay an upfront fee of 1.75% of your home loan value plus an annual premium that can vary from 0.45% to 1.05%.

U.S. Department of Agriculture Loans

Loans offered by USDA are backed by the agency’s Rural Development Guaranteed Housing Development Program and come with a strict set of requirements to be approved. 

USDA-backed loans are available to low or moderate-income homebuyers looking to purchase a home in eligible rural or suburban areas as determined by the agency. If you fall into this category of homebuyer, then the good news is there are typically no down payment requirements to satisfy. 

While this is good news, you should still consider the following requirements before seeing a USDA-backed mortgage loan:

1. While there are no set credit score requirements, most lenders will look to a credit score of 640 or higher. 
2. Private Mortgage Insurance (PMI) is typically a requirement for USDA loans and requires you to pay an upfront fee of 1% of your home loan value plus an annual premium of 0.35%

U.S. Department of Veterans Affairs Loans

The Department of Veterans Affairs offers VA-backed loans to active duty service members, veteran service members, eligible spouses of a veteran, and World War II allied veterans. These government-backed loans come with attractive and less stringent credit, income, and down payment requirements. 

Before applying for a VA-backed home loan, consider the following:

1. Work with an expert lender, like Lendevity, to prepare all necessary documentation. 
2. Consider the home types you are allowed to purchase with a VA loan. Some housing types, like condos and manufactured homes, are not approved by all lenders. Make sure you confirm with your lender.
3. Save enough money to pay the upfront lending fee, which ranges from 1.4% to 3.6% of the loan amount. 

Fixed-Rate Mortgage Loan

A fixed-rate loan is a conventional loan that offers a fixed rate of interest for the duration of the loan. There are two types of fixed-rate loans: 30-year fixed-rate loans and 15-year fixed-rate loans. 

As the names suggest, these fixed-rate loans set the interest rate at a fixed rate for 30 years or 15 years. Because your lender calculates your loan payment to include the interest rate, this type of loan locks in your monthly loan payment and your interest payment for the duration of your loan. 

Fixed-rate loans stabilize your interest rates and typically reduce your loan balance, but be aware that 15-year loans may come with a lower interest rate but need to repay in a shorter window of time, increasing monthly payments. 

Some things to consider before seeking a fixed rate home loan:

• Consistent and stable monthly payments – you always know what you owe.
• Know exactly how much you’ll pay over the course of the loan with your set interest rate.
• As one of the more popular mortgage loan options, you may have an easier time applying and being approved by your lender. 

Adjustable-Rate Mortgage Loan

Adjustable-rate mortgages (ARMs) rely on variable interest rates. This means a lender may approve your mortgage at a lower interest rate that slowly rises for the loan duration. An adjustable-rate mortgage interest rate is typically lower than a fixed-rate mortgage. Thus, making it a great choice for homebuyers looking to pay less money upfront. 

There is a wide variety of ARMs that may be right for you. Schedule a call to talk with us today. We’ll walk you through your ARM options, including:

• 5/1 and 5/6 ARMs – provide a 5-year fixed-rate mortgage that adjusts interest rates every year or every 6 months after those first 5 years. 
• 7/1 and 7/6 ARMs – provide a 7-year fixed-rate mortgage that adjusts interest rates every year or every 6 months after those first 7 years. 
• 10/1 and 10/6 ARMs – provide a 10-year fixed-rate mortgage that adjusts interest rates every year or every 6 months after those first 10 years. 

Other Types of Mortgage Loans to Consider

Now that we’ve covered the most common types of mortgage loans, let’s look into some more uncommon loans. While these loans may not fit everyone’s needs, they still offer certain benefits that you may want to consider before speaking to a lender about a mortgage home loan. 

Construction Loans

These short-term loans can be the right choice for buyers looking to cover the costs of their new custom construction home. Before pulling the trigger on this type of loan, keep in mind you will need to apply for a mortgage home loan once the construction is complete. 

Balloon Loans 

While you can apply these loans to many types of financing, mortgage borrowers need to pay a lump sum amount at the end of the loan period. Your lender can include principal and interest payments in a balloon mortgage loan, which leaves you with a lower lump-sum payment. Because a lender can customize this loan on a borrower’s unique needs, borrowers should carefully consider whether this loan is the right fit.  

Interest-Only Loans

These loans allow borrowers to pay only the interest payment for a set amount of time. It is typically the first 5 or 10 years of the loan. Because interest-only mortgage loans can be fixed-rate or adjustable-rate, it’s important to talk with your lender about what the right option is for you. 

Piggyback Mortgage Loans

Piggyback mortgage loans allow a borrower to apply for two mortgages in order to avoid paying Private Mortgage Insurance (PMI) and large interest rates. These loans even allow for a smaller down payment requirement. This can be a good strategy for interested borrowers in applying for a jumbo loan or other non-conforming loans. 

Reverse Mortgage Loans

Reverse mortgage loans are a great fit for borrowers aged 62 years or older who have paid off their mortgage. These types of loans allow borrowers to withdraw a certain amount of tax-free equity from their existing home without the burden of repayment until they sell the home or the borrower dies. 

As a borrower, you have many options to fit your particular needs when it comes to mortgage loans. From conforming loans to government-backed, there is a loan for every borrower. 

If you’re ready to take the next step in your home buying journey, reach out to Lendeivty today. 

We match you with the perfect lender to guide you through the entire process, from loan selection to closing on your home. We are committed to getting our customers the best deal, terms, and home buying experience.

Get started with Lendevity today!

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