Choosing a Fixed Rate Loan
Fixed rate loans generally come with one of two options; the 30-Year Fixed and the 15-Year Fixed. If a borrower is planning on being in the same home for a long period of time, a 30-Year Fixed may be more attractive because it offers stability. The monthly payment will remain consistent over the life of the loan. If interest rates are at historic lows at the time the borrower is seeking to obtain financing, this is a good program to consider. A 15-Year Fixed loan program offers the same stability, but the accelerated amortization schedule makes the monthly payment substantially higher. While...
Read MoreNeed a Smaller Down Payment?
While down payment requirements have increased for some programs, it is still possible to buy a home with less than 5% down…or even NO money down. For example, FHA offers a loan program that requires as little as 3.5% down. In addition, the VA and USDA offer loans that require no down payment. Of course, there are restrictions with each of these programs that can include maximum loan amounts based on your location with FHA loans, income and property requirements for those offered by the USDA, and your qualifying status as an eligible Veteran. In addition to those programs, keep in mind that...
Read MoreThe Race for Equity: Choosing the Right Loan Program
Those who take property ownership seriously often look for options to build equity at a faster pace. An aggressive approach is to select a 15-year loan program over a 30-year mortgage. A 15-year loan works well for home buyers budgeting time and money, those who are possibly looking forward to a debt-free retirement, or those who plan to upgrade to a larger home within 15 years. But this requires a sincere commitment to making substantially larger monthly payments. Provided the homeowner can afford the financial commitment of a 15-year loan, they will pay significantly less money in interest...
Read MoreWhy Waiting To Buy A Home Will Cost You This Spring
Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA). Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board’s mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save...
Read MoreThe Home Equity Line of Credit
Home equity lines of credit have become increasingly popular, and there are many types of loan programs available in this genre. This type of credit line is not meant for day-to-day expenses as a credit card would be, however, many consumers use their home as collateral to obtain an equity line of credit to pay for higher ticket items such as educational expenses or home improvements. Borrowers may want to compare the advantages of a traditional second mortgage over an equity line of credit. But they should not compare these programs based on the Annual Percentage Rate (APR) alone. The APR in...
Read MoreHigh Cost Conforming Loan Limits Increase to $729,750
High cost loan limits come full circle. The Economic Stimulus Act of 2008 allowed conforming loan limit increases in high cost counties around the country. Those temporary increases were set to expire on January 1, 2009, which reset the maximum high cost loan to $625,500. However, page 111 of the American Recovery and Reinvestment Act of 2009 reinstated the 2008 limit. This guarantees that high cost home loans in certain areas can be insured by Freddie or Fannie up to $729,750. With the reinstatement of the 2008 limit, more potential home buyers will now qualify for Fannie Mae or Freddie Mac...
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