Compare your mortgage options

Military service members and their families can leverage a loan program offered by the U.S. Department of Veterans Affairs (VA).

With this program, the borrower(s) can receive 100% financing for the purchase of a home. That means no down payment whatsoever.

Benefits of a VA Loan

– No down payment is required in most cases.

– No monthly mortgage insurance premiums (often referred to as PMI)

– Offers the benefit of predictability as your monthly payment doesn’t change.

– Closing costs are limited.

– Lower than average interest rates as compared to conventional loans.

– No prepayment penalties. VA buyers can pay off a loan early without any financial penalties.

The The Federal Housing Administration (FHA) mortgage insurance program is managed by the Department of Housing and Urban Development (HUD).

FHA loans are available to all types of borrowers, not just first-time buyers. While the buyer will have to pay for mortgage insurance (often referred to as PMI), the down payment requirements for this type of loan are as little as 3.5% of the purchase price.

Benefits of a FHA Loan

– Requires less of a down payment to qualify.

– Is a viable option for buyer with “less than perfect” credit.

– Interest rates are typically lower than rates on conventional loans.

– Buyers can ask sellers to pay up to 6% of their closing costs, as compared to a 3% limit with conventional loans.

Fixed-rate mortgage loans have the same interest rate for the entire repayment term.

With a fixed-rate loan, your monthly principle payment will remain the same, month after month, and year after year through the life, or term, of your loan.

Adjustable-rate mortgage loans (ARMs) have an interest rate that will change or “adjust” from time to time.

The most common type of ARM has a rate that will change yearly, after an initial period of a fixed rate.

For example, a 3/1 ARM loan has a fixed interest rate for the first three years, after which the rate will change every one year.

Because the rate doesn’t change, or is “fixed” through this initial period and then “adjusts” thereafter, this type of loan is often referred to as a “hybrid” product.

Benefits of a Adjustable Rate Mortgage Loan

– During the initial period, the interest rate is generally lower as compared to average rates for fixed-rate mortgages.

– Lower initial interest rates result in a lower payment through the initial term of an ARM

– ARM loans have a rate cap that limits how much the rate can change from one month to the next, and over the life of the loan.

– An economical choice for buyers who only plan to stay in the home for a few years.

Are the you ready to take out your first mortgage? Is buying or renting the smarter financial decision?

Learn how to prepare and start saving to buy a home, what the home buying process looks like, everything you should know about realtors, and more…

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