Getting the right type of real estate home loan is an important part of the home buying process. I have put together some very basic information regarding the types of real estate home loans that are common in the market today:
Fixed-rate mortgages: Fixed rate mortgages are mortgages where the interest rate stays the same for the entire term of the loan. The advantage to a fixed rate mortgage is that if you lock a relatively low rate, your payment won’t go up when rates do.
Adjustable-Rate Mortgages: With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. The rate of the loan is based on adding points to a fixed base.
Hybrid loans: A hybrid loan combines a fixed period along with an adjustable component. Usually these loans are fixed for a period of time and then the loan becomes adjustable where it is dependent on current rates.
FHA real estate home loans: An FHA loan is a loan in the United States that is insured by the Federal Housing Administration.
VA real estate home loans: A VA loan is a loan in the United States guaranteed by the Veterans Administration. The loan may be issued by qualified lenders. The VA was designed to offer long-term financing to American Veterans or to their surviving spouses.
USDA: The USDA Rural Development Loan program is one of the last true "No Money Down" loan options on the market. This is backed by the United States Department of Agriculture (USDA). This loan program offers 100% financing, flexible credit guidelines (you need to have at least a 620 FICO score or higher), fixed interest rates, no maximum loan amount available for new and existing homes. This loan applies to only selected geographic areas.
The first thing you should do:
When the time comes that you are wanting to purchase a home any time soon, it is imperative to speak with a good loan officer before looking at properties. They will help you with preparing yourself financially for this special time in your life. They will also present to you specific loan programs that will be applicable to you. You should get your bearings on how much you will qualify for so when shopping for homes, you can direct your attention to the price range of properties you can afford. Having a good lender will make or break the sale so it is imperative that you select one who is reputable, and connected with a good firm with a good reputation.
You will need to be pre approved, so when you find that special home you want, you will be prepared to submit an offer with that pre approval letter from your selected lender and know what type of loan will be best suited for you.
If you are looking to purchase a property on Oahu, I will be happy to assist in referring you to a few local competent lenders to consult with, at no initial cost. I am also available to help you find that special home in paradise!! Feel free to call!!!
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