In your quest to become a homeowner, you’ll have plenty of decisions to make, from the type of home you want to how much you’re able to offer for a down payment. Another decision you need to take care of is the type of mortgage loan you choose. Depending on your specific situation and qualifications, you might have several options, or you could only have a few. Wyndham Capital Mortgage brings you five mortgages for which you may qualify.
1. 30-Year Fixed Mortgage
If there’s a good chance that you’ll most likely stay in the same home for the next several years, a 30-year fixed mortgage could be a great fit for your needs. This mortgage option offers an unchanging rate and monthly payment for its entire life, which makes it easier to budget from month to month. Another notable feature of this loan is that borrowers can take advantage of a tax deduction for the interest they pay on the loan. If you either don’t want a loan that lasts as many as 30 years or if you simply can’t afford the payments of a 15-year fixed mortgage, you might be more comfortable with a 20-year fixed mortgage.
2. 20-Year Fixed Mortgage
Just like a 30-year mortgage, a 20-year mortgage has unchanging monthly payments and an unchanging interest rate. Compared to a 30-year mortgage, one that lasts only 20 years has a lower interest rate, which is another feature you may enjoy. That being said, you have to bear in mind that a mortgage that lasts 20 years has higher payments, but not as high as those associated with a 15-year home loan. While a fixed mortgage means borrowers aren’t able to cash in on future lower interest rates, they do have the option to refinance their fixed loan.
3. Adjustable-Rate Mortgage
If you don’t mind taking a bit of a gamble and qualify for a mortgage loan with an adjustable rate, you could be well-pleased with an adjustable-rate mortgage. Unlike a fixed mortgage, the monthly payments and interest rates of an adjustable-rate home loan shift up and down according to the whims of the market. This is beneficial because your initial interest rate is lower than that of a fixed mortgage. As far as the disadvantages, there’s no predicting future interest rates, which can reduce your budget to a tattered mess.
Related: What's Included in a Mortgage Loan?
4. FHA Mortgage
If you aren’t financially comfortable with the down payment or lending requirements of conventional loans, you may qualify for a Federal Housing Administration loan. These loans are an especially great option for borrowers who don’t have the best credit as well as those who have trouble saving a substantial down payment. You may qualify for an FHA loan if you have a credit score as low as 580 and can commit to a down payment as low as 3.5 percent. Another boon to this mortgage option is that your closing costs could be covered, which is one less thing you have to worry about.
5. DU Refi Plus Mortgage
If you already have a mortgage and are looking to refinance, you might qualify for the new DU Refi Plus option. This home loan is eligible to homeowners with little to no equity in their properties. One caveat is that Fannie Mae must either own or back your mortgage in order for you to qualify for a DU Refi loan. The program is ideal for investment, primary and secondary residences, and you can even include all closing costs with the loan.
You’ve got plenty of decisions to make on the road to becoming a proud homeowner. Think each choice over carefully, and always run your decisions by a mortgage professional before signing papers or agreeing to any terms. Don't forget, we're here to be a resource for you! Click below to learn more about how we can help you.