Shopping for a home loan can get as complicated and confusing as shopping for the house itself. Indeed, the sheer range of financing options with varying terms and benefits can baffle home-buyers no end. Moreover, many of them may not even be aware of some of the types of mortgages that are available to them and can make it easier to own a home.
Following is a broad look at the popular options in Irvine home loans:
–Fixed-rate conventional home loan – This is a standard mortgage that is suitable for people with good credit scores and debt-to-income ratios. The process is pretty straightforward and simple. The period can vary from 10, 15, 20 to even 30 years with the latter being the most common. The fixed-rate loans have the same interest rate and the monthly payments remain the same throughout the life of the loan.Foreign National Loans Fort Lauderdale has some nice tips on this.
-Adjustable-rate conventional home loan – This is a variation of the usual mortgage where the interest rate is fixed for the initial few years and then varies year on year. The change may be fixed beforehand or depend on the current interest rates.
-FHA home loan – This loan is guaranteed by the Federal Housing Administration and is available for first-time home buyers with low credit scores or savings. The down payment is also very low, but the borrower has to pay a premium on the loan.
-VA loan – A Veteran Affairs loan can be easily accessed by military veterans, active service members, and certain eligible spouses. This is 100% financing as the borrowers do not have pay any down payment. There are limits on the loan amount and a funding fee will be charged on the loan.
-USDA loan – This rural development loan again offers 100% financing but only for borrowers in rural areas. There are limits on the property location, income level, and a premium is also levied on the loan amount.
-Jumbo loan – This is another unconventional home mortgage as the loan amount is rather huge and exceeds the conforming limits. It is suitable for buying expensive luxury homes backed by a high credit score and low debt-to-income ratio. The down payment will also be significantly higher. There is an interest-only option also wherein the borrower is required to pay only the interest for the first few years.
-Reverse mortgage – This is a delectable option for senior borrowers aged 62 or above. It allows them to tap into the equity of the house by doing away with the mortgage payments. The homeowner enjoys the ownership even while receiving a monthly payment from the lender.
-Specialty loans – Then there are special loans that allow alternative documentation like bank statement, cash flow, assets, and so on. Some of the programs are Expanded Criteria, Bank Statement Income, Asset Income program, Foreign National program, and so on.