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Home Loan and Rate Types

It is very important to keep in mind the various types of loans available. Understanding your specific needs will make a world of difference when searching for the right information. For instance, among the various loan types, you may run across names such as; Piggyback Loans, CODI Loans, 80/20 loans, Self Employed Refinance, the list goes no and on. The important thing is to have an open mind as to what type of loan suits your particular financial situation. Click here if you'd like to have a personal consultation with a specialist to explain all the deltails. You may also want to read the other articles at the bottom left of this page.

FHA Loans

The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. The Federal Housing Administration (FHA) was established in 1934 to improve housing standards and conditions and to provide an adequate home financing system through insurance of mortgages. Families that would otherwise be excluded from the housing market were finally able to buy the homes of their dreams.

Fixed Rate Mortgages

With a fixed rate mortgage loan the interest rate and your mortgage monthly payments remain fixed for the period of the loan. Fixed-rate mortgages are available for 40, 30, 25, 20, 15 years and 10 years. Generally, the shorter the term of a loan, the lower the interest rate you could get. The most popular mortgage terms are 30 and 15 years. With the traditional 30-year fixed rate mortgage your monthly payments are lower than they would be on a shorter term loan. If you can afford higher monthly payments a 15-year fixed-rate mortgage allows you to repay your loan twice as fast and save more than half the total interest costs of a 30-year loan.

Interest Only Loans

The loan product commonly called 'Interest Only Mortgage' is an interest-only payment option which is offered on fixed rate (FRM) or adjustable rate (ARM) mortgages. Interest only payments are often an option with Pay-Option ARM loans. The option to pay 'interest-only' lets you pay only the interest portion of your monthly payment for a fixed period (three, five, seven or ten years). At the end of that period your loan becomes fully amortized, thus resulting in greatly increased monthly payments. Your new payment will be larger than it would have been if it had been fully amortizing from the beginning. The longer the interest only period, the larger the new payment will be when the interest only period ends. However, there are many situations where this type of loan is recomended. it all depends on your overall financial goals. To get advice based on your personal circumstances Click here.

Adjustable Rate Mortgages

Adjustable Rate Mortgage or ARMs are appealing because they usually offer a low initial interest rate and payment. Adjustable loans are also worth considering if you plan to be in your home a short time. For the borrower, this means you can qualify for a larger mortgage loan. Furthermore, at times when rates are falling the borrower can take advantage of the lower interest rates without the refinancing their mortgage. With an Adjustable Rate Mortgage - ARM, your monthly payment may change frequently and significantly over the term of your loan. You'll have to decide if you can afford to take this route and if you can stomach it. Some borrows find the concept of varying interest rates a bit scary, others are willing to take the risk. Consulting with one or more professionals will help you make a more informed decision.

Debt Consolidation Loan

A Debt Consolidation Loan is a type of loan that allows the borrower (home owner) to payoff all or a portion of existing debt (including the existing mortgage loan) from loan proceeds. Debt Consolidation is an excellent way to reduce your monthly payments while satisfying all of your credit obligations without the stigma of non-payment or bankruptcy. These loans can reduce your monthly bills by up to 70% and do away with all your existing credit card debt, loans and other debts. In replacement you will have one single lower monthly payment. You may qualify for lower rates than regular home loans; also your interest may be tax deductible. This product offers home owners a better method of financing that will pay off debts and, if done right, permanently improve your financial situation. If you would like free, multiple quotes from competing lenders click here. Compare rates and terms from various lenders and save.

Home Equity Loans

With a Home Equity Loan you can use your home as collateral to consolidate bills, make home improvements, plan a vacation or buy a new car. Equity loans often work like a line of credit. There is also The Title I loan for individuals requiring funds for home improvement, but who have little or no equity in their property or who live in a state where equity loans are very limited. If you have some equity in your home you may want to consider refinancing for your home improvements. Title I loans bear a higher interest rate than other loan types available, however understandable.

You can cash out your equity in your house for any need you may have, with a home equity loan, all of your options are open (i.e., college education, debt consolidation, home improvement, etc). This type of loan allows homeowners to acquire a loan in addition to their original mortgage/lien using a portion or all of the equity in their home (primary residence). Consider your specific overall financial goal carefully when thinking about refinancing as you will have many options.

Before you decide on anything speak with two or more companies for a personal consultation.


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