We always recommend having the help and advice of a trained and experienced Realtor. With their guidance, you can apply for credit in the place that best suits your needs, whether you are a student, newly married, large family, veteran, retired, foreigner, etc. The Realtor is the one who will best advise you on where to apply for your mortgage loan. However, if you do not have this advice, you can go to the following places:
Banking Entities: It is a good start if you already have a financial institution that supports you and knows your finances. We must clarify that banks typically have few credit options, so it is wise to talk with your trusted bank advisor and compare credit programs with a few options before you decide.
Non-bank lenders: Such companies are generally willing to work with applicants that such banks try to avoid due to their risky financial profile. If you have a poor credit history or some other stain on your past credit history, you will have better luck with non-bank lenders that provide more than half of all credit types.
Mortgage Broker: Mortgage brokers are people that can help you through a wide range of options to find a loan that fits your reality. They work with many financial institutions, so they help you identify the different interest rates and programs.
Types of Mortgage loans
There are a wide variety of types of mortgages available. So how do you decide which one is better? Here are the basic types of real estate loans you should consider:
Fixed-Rate Mortgage: This type of loan does not vary when the mortgage is in force; while the rate may be slightly higher than in other kinds of loans, this is a good option for buyers who like to be confident that your monthly payment will not increase.
Adjustable-Rate Mortgage: A variable-rate mortgage starts with a low-interest rate in the first years. Then that interest rate is adjusted after a certain period (typically five years) according to market indices. As a result, the buyer enjoys a low-down payment on the mortgage. However, this type of loan can feel risky if interest rates go up too much. Even when there is a chapter in the clauses that prevent negative consequences, it is wise to check the loan terms and consider your situation. Carefully determine if an adjustable-rate loan is the one for you. Another option? You can qualify to refinance a loan of this type before the rate varies.
Federal Administration Mortgage Loan: usually called FHA, requires an initial payment as low as 3.5%. Therefore, this type of loan recommends first-time homebuyers, who typically have less money available for an initial or less outstanding credit record. The hook? This type of loan requires that you pay for mortgage insurance.
VA Loan: If you have served in the United States military service, a VA loan for veteran affairs may allow a home buyer to qualify for a mortgage loan without advancing the mortgage money, without insurance payment, and with convenient fees in terms of interest. The detail is that to be eligible for this type of loan; you must have served for 90 consecutive days during wartime, 180 days in peacetime, or six years in the reserve.
Department of Agriculture Mortgage Loans (USDA): are assigned to families in rural areas. The government finances 100% of the price of the house (without initial) proven pre-qualification. The mortgage interest rate is very favorable too.
How long do Mortgage loans last?
The loans to buy houses have different periods of duration, which translates into when the lender will keep the monthly payments until the debt reduces to zero. The two most common terms are 30 years and 15 years. The expense of a 15-year loan is higher each month, but the shortest time saves you money on interest.
How to decide on a Loan
As the loans come with different interest rates, time lapses, closing costs, and more, it is standard for buyers or applicants to tend to compare options before deciding which one is the best.
In the same way that the interests offered by the financial institution that grants the loan tend to present fluctuations daily, directly impacting the payment, buyers should investigate as much as possible. In this way, they will make a valid comparison.Ideally, work with a patient and qualified credit counselor to help you analyze your options. This can help you determine which type of loan is best for your situation. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.