Financing Your Home: Six Loans That Could Help You Get the Home of Your Dreams
It is the dream of almost every American to buy a home. It takes a lot of effort and persistence to make this dream come true, but it is within the grasp of every person who wants it. Not many people are able to afford a home through their own means. Most people need to take out loans to make their dreams of home ownership come true. If you dream of owning your own home, here are six home loans that can help make it happen.
1. Fixed-Rate Mortgage
This is one of the most common types of home loans. With a fixed rate mortgage, a home buyer typically puts down a deposit of 10 or 20 percent of the purchase price. The rest of the money is borrowed in the form of a mortgage that charges a fixed rate of interest per year. These are usually taken out for periods of 20 or 30 years.
2. Adjustable-Rate Mortgage
This is another very common form of home loan. Adjustable-rate mortgages are much the same as fixed-rate mortgages. The only major difference is that the interest rate of the loan is periodically adjusted by the bank to reflect the current interest rate determined by the credit market.
3. FHA Loans
The Federal Housing Administration (FHA) offers first-time home buyers a chance to buy a home without saving up a huge down payment. Typically, FHA home loans only require the buyer to put down three percent of the purchase price to buy their homes.
4. FHA Construction Loans
As well as offering loans for buying an existing home, the FHA also offers first-time home buyers the chance to build their own homes. An FHA Construction Loan allows home buyers to pay for all the construction costs of their new homes. The FHA 203k lenders have increased the debt limit, allowing those who need more money for construction to get the funding they need.
5. Down Payment Assistant Loans
Many states offer government programs that will offer loans that buyers can use to make their down payments. They can combine the down payment assistant loan with a typical housing loan. This allows buyers to borrow the entire cost of their new homes.
6. Graduated Payment Mortgages
This is a popular loan type for home buyers who are early in their careers. With this type of mortgage, homebuyers only have to make small monthly payments for the first five or ten years of the loan. Later on, the monthly payments are raised substantially to make up the difference.
These six types of loans can all help you get the home of your dreams. You simply need to choose which one will work best for your situation.
