What different types of mortgage finance loans are most typical?
The most popular, and often safest, home financing option is a fixed rate mortgage. Basically, this means that the monthly house payment will never fluctuate throughout the loans existence. This insures that even when the mortgage rates increase across the country, your rate will be locked in at what it was when you signed the mortgage. There is also another type of popular home loan financing option. ARM (Adjustable Rate Mortgage) Loans. These loans are great when the housing market is doing well. You can often start off on a cheaper monthly term with an apr loan. There is a lot of risk though. As soon as the housing market looks to go a little south, your mortgage will instantly go up per month until the forecast is better.
Are there mortgage programs for first time lenders?
Yes, there are a good variety of financing options for first time homeowners. They are able to help with bad credit, and low down payments. They will work extra hard with you to get you your first home mortgage.
What will determine my monthly mortgage payment?
The amount you are borrowing for the mortgage, the amount you put down on the home, the current home mortgage interest rates, how long your mortgage is (usually 30 years), and payment schedule, along with your credit history, and amount of money in bank after downpayment, will all play a role in determining your mortgage financing rate.
What does the interest rate have to do with getting mortgage financing?
When there is a lower interest rate, you are able to borrow more cash, therefore getting a bigger mortgage, and pay less for it every month. Remember this does not apply to arm loans, which can vary from month to month. Make sure you are locked into a fixed rate, and that it is locked in for the entire length of your loan.
How large of a down payment do I need?
Typically, try to put 20% down on the mortgage, although you can find lenders that will accept as little as 4% down. The more you put down the better it will be for you in the long run.