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Financing Options For Real Estate
By: David Burch
Home ownership has changed over the last decade or two. It used to be that you had to have stellar credit and make an above average salary to afford a new home. As the make up of our country continues to change, so do the options for financing the dream of owning a home.
Once upon a time, there were two types of mortgage loans: fixed rate and adjustable rate mortgages. Now, the number of financing options will make your head spin. No matter what your credit history, job, or family situation, there is an option that can help you.
Let's start with the most common type of loan a fixed rate mortgage loan. With a fixed rate loan, the monthly payment that you make will stay the same for the life of the loan. In today's market, that can be a five, ten, fifteen, twenty, thirty, or forty year mortgage. The length of term depends on what the buyer can afford to pay. These loans are traditionally for individuals that are a low credit risk.
Then, there is the adjustable rate mortgage. An adjustable rate mortgage is just that. The rate at which your monthly loan payment is calculated is subject to change on a yearly basis. It fluctuates with the market. This can be a good choice for someone who is shopping for a mortgage when the interest rates are low and look to stay that way for a while. If you have had credit problems in the past, it is a safe bet that you will qualify for some type of an adjustable rate mortgage.
VA loans are provided to veterans through the government. Veterans across all branches of the armed forces qualify for a VA loan. The particular requirements vary depending on the branch of service. This type of mortgage loan does not require the borrower to provide a down payment.
FHA loans are funded by the government. They are an excellent loan option for first-time buyers with not a lot of money. The amount of the FHA differs depending on your area, but the full amount is available to you if you qualify. With an FHA loan, the typical down payment amount is anywhere from two to five percent of the mortgage loan amount.
There are other options besides those mentioned above. One such option is the interest-only mortgage loan. This loan allows the borrower to make interest-only payments during a certain period of time. Some require a balloon payment if interest only is to be paid for a substantial amount of time.
Financing options for commercial differ from those for residential ownership. Property that will not be used as the primary dwelling of the borrower is an investment property and, therefore, a riskier investment for the lending institution. If a borrower found themselves in a financial bind, they would tend to the mortgage for their primary dwelling before addressing the mortgage of an investment property.
A person looking to finance an investment property has more stringent criteria to meet. The credit rating of the borrower must be in excellent shape. Since this property is second to their own home, the lending institution must be assured that the borrower can repay the loan. The down payments are much higher than for a residential mortgage loan.
Financing options exist for the home buyer and those looking to invest in real estate. Investigate on your own to see what options apply to you. Then, go see a mortgage broker or lending institution to find out more.
About the Author:
David Burch specializes in articles about the Clovis, NM market. For more articles on Clovis, NM Real Estate, please visit his websites: http://ClovisHomeTours.com and http://SouthernNewMexico.com .
By: David Burch
Once upon a time, there were two types of mortgage loans: fixed rate and adjustable rate mortgages. Now, the number of financing options will make your head spin. No matter what your credit history, job, or family situation, there is an option that can help you.
Let's start with the most common type of loan a fixed rate mortgage loan. With a fixed rate loan, the monthly payment that you make will stay the same for the life of the loan. In today's market, that can be a five, ten, fifteen, twenty, thirty, or forty year mortgage. The length of term depends on what the buyer can afford to pay. These loans are traditionally for individuals that are a low credit risk.
Then, there is the adjustable rate mortgage. An adjustable rate mortgage is just that. The rate at which your monthly loan payment is calculated is subject to change on a yearly basis. It fluctuates with the market. This can be a good choice for someone who is shopping for a mortgage when the interest rates are low and look to stay that way for a while. If you have had credit problems in the past, it is a safe bet that you will qualify for some type of an adjustable rate mortgage.
VA loans are provided to veterans through the government. Veterans across all branches of the armed forces qualify for a VA loan. The particular requirements vary depending on the branch of service. This type of mortgage loan does not require the borrower to provide a down payment.
FHA loans are funded by the government. They are an excellent loan option for first-time buyers with not a lot of money. The amount of the FHA differs depending on your area, but the full amount is available to you if you qualify. With an FHA loan, the typical down payment amount is anywhere from two to five percent of the mortgage loan amount.
There are other options besides those mentioned above. One such option is the interest-only mortgage loan. This loan allows the borrower to make interest-only payments during a certain period of time. Some require a balloon payment if interest only is to be paid for a substantial amount of time.
Financing options for commercial differ from those for residential ownership. Property that will not be used as the primary dwelling of the borrower is an investment property and, therefore, a riskier investment for the lending institution. If a borrower found themselves in a financial bind, they would tend to the mortgage for their primary dwelling before addressing the mortgage of an investment property.
A person looking to finance an investment property has more stringent criteria to meet. The credit rating of the borrower must be in excellent shape. Since this property is second to their own home, the lending institution must be assured that the borrower can repay the loan. The down payments are much higher than for a residential mortgage loan.
Financing options exist for the home buyer and those looking to invest in real estate. Investigate on your own to see what options apply to you. Then, go see a mortgage broker or lending institution to find out more.
About the Author:
David Burch specializes in articles about the Clovis, NM market. For more articles on Clovis, NM Real Estate, please visit his websites: http://ClovisHomeTours.com and http://SouthernNewMexico.com .
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