If you’ve wanted to own your own home, there’s no better time than the present. Interest rates are at the lowest they’ve been, allowing Americans to finally accomplish their dreams of owning their own home. Of course, many worry about all the potential homeowner issues but the benefit of owning a home is definitely worth it.
Fellowship Home Loans wants to assist potential new homeowners fulfill their dream. We want to teach you about your various mortgage options. We have knowledgeable loan officers that can guide you through the process step-by-step to help you understand your financial situation.
The Many Benefits of Owning Your Own Home
- Treat yourself! When you lease, you are paying another person’s mortgage. Use your hard-earned cash to help yourself.
- Build equity in your very own house. Each home mortgage settlement has 2 components: the principal and the interest rate. A portion of the monthly payment will minimize the principal balance and increase your equity.
- Over time, equity ends up being an outstanding resource of security to obtain future life improvements – home renovations, kids’ college expenses, or business expenses. If you get your equity up high enough, those loans have even lower interest rates.
- You can deduct your mortgage from your taxes.
- The current low interest rates means your monthly mortgage will be way lower than paying rent.
- The homeowner real estate tax is also tax deductible.
Pick the Mortgage Loan That’s Best for You
There are a number of mortgages from fixed-rate to adjustable rate, from FHA to VA loans. Below is a recap of the different types of loans you can take advantage of and what the pros and cons of each are.
Fixed-Rate Conventional Mortgage
A fixed-rate home mortgage could be used to acquire a brand new house or to refinance a present home loan.
This is a relatively traditional sort of home mortgage, especially for customers with great to excellent credit rating scores. Loans must comply with standards developed by Fannie Mae and Freddie Mac, firms developed by Congress to get lendings from loan providers, adding liquidity and security to the home mortgage market. Standard home loans are not guaranteed or assured by the U.S. government.
A fixed-rate mortgage has the very same interest rate throughout the life of the loan, which could be from 10 to 30 years.
In order to get a fixed-rate home loan, a consumer has to fulfill the standards for:
- The customer’s credit rating
- A minimum deposit
- The debt-to-income proportion – which means how much income are you bringing in versus how much money do you owe on other loans.
There are numerous expenses connected with a traditional home mortgage that might consist of closing costs, home loan insurance coverage, and points. Many individuals favor fixed-rate home loans due to the fact that their monthly payments will never increase.
An adjustable-rate mortgage has fluctuating interest rate from month-to-month depending on things like the T-Bill Index. People gravitate to ARMs because of the low intro interest rate and the 30-year option. Borrowers applying for an ARM must meet Fannie Mae and Freddie Mac guidelines
ARMs are ideal for buyer’s looking to sell their home before the full loan term and hopeful that their income will increase shortly. However, it’s necessary to consider that, if the benchmark is higher when it’s time to adjust the interest rate, the monthly mortgage payment will increase.
FHA(Federal Housing Administration) Mortgage Loans
An FHA loan is acquired through an FHA-approved loan provider such as Fellowship Home Loans. FHA loans require insurance from the FHA which protects lenders if a borrow ever defaulted on the loan. With low interest rates, lenient credit score requirements, lower closing costs, and minimum down payments of 3.5%, FHA loans are very popular.
FHA insurance costs contain an advance of 1.75 %of the loan, which could be funded with the mortgage. The annual premium is paid monthly with the loan payment and depends on the term of the loan and the down payment.
VA Mortgage Loans
If you’re currently in the U.S military or have been in the U.S military in the past, you’re eligible for a VA loan. The Department of Veteran Affairs sets up the loans but you acquire them from approved lenders like Fellowship Home Loans. The most attractive part of a VA loan is that you can borrow up to 100% of the home’s value without mortgage insurance.
HARP Mortgage Loans
HARP enables borrowers to obtain an additional home even with little to no equity in their current house. The borrower needs to be current on their current payments, and the loan has to go through Fannie Mae or Freddie Mac. Under HARP, borrowers could minimize their regular monthly payments by obtaining a reduced rate, thus reducing the term of their loan.
Get Started Today!
Whether you have a house you’ve looked at already or are waiting to talk to someone before you begin, call us at 1-800-804-SAVE (7283) and a qualified loan officer will help you!