|By Angela Deines; Angela Deines Special to The Capital-Journal|
Choosing the type of loan that best fits your needs doesn't have to be complicated, as long as you provide your lender with all the most accurate and necessary financial information.
Before deciding what type of loan you want, think about your future.
- Will you be in the home for a long time? A loan with a lower monthly payment and a low, fixed interest rate may be the best for you.
- Do you want to have your home paid off before your children enter college or before you retire? Then a shorter term loan may be in your best interest but expect to have higher monthly payments.
With whatever type of loan you are thinking about, your lender can help you figure out what your monthly payments will be with a mortgage calculator.
Conventional loans: These are 5- to 50-year (although most are 15- and 30-year mortgages) fixed rate or Adjustable Rate Mortgage (ARM) loans that require three to 20-percent of the purchase price as a down payment. These loans aren't backed by the U.S. government. Closing costs are paid for by the buyer or seller, depending on what is negotiated in the real estate contract.
These loans also require
Your down payment on an FHA home can be as low as 3.5-percent of the purchase price, and most of your closing costs and fees can be included in the loan. FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan.
People who can't obtain a conventional loan often can receive an FHA loan because of weak credit or the inability to make a down payment.
No down payment for a
According to the
First-Time Homebuyer Program in
The grants for these loans don't have to be repaid and are given in conjunction with 30-year, fixed-rate high loan-to-value mortgage loans through FHA, VA and
The program is available for the purchase of a house, duplex, semi-detached home, condominium, townhouse, or qualified manufactured home on a permanent foundation. This program is a benefit for sellers as it stimulates the local housing market by allowing sellers to sell their home more quickly. For more information about this program, go to the
*Be sure to check with your lender to make sure you are aware of all the home loans that may be available to you. Ask as many questions as possible and understand that you may not qualify for the first kind of loan you may want, depending on your credit history and other factors.
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