Buying a new home is a financial investment that is sure to affect your life for many years to come. In order to have it be the least possible financial burden, so you can enjoy your new home as well as everything else that life has to offer, there are multiple financial options that are different for people depending on their financial standing. Many people do not know of their financial options before they take out a loan in order to purchase a new home, which can have lasting effects for many years to come. Here are five financial options to look at before purchasing your new home.
FHA Loans
If you are a first time home buyer, a FHA loan is an option to consider. These loans allow people to make a lesser down payment (sometimes as little as 3%) and can be qualified for with less-than-stellar credit. New rules have made it to where FHA loans will not exceed the statutory limit, making it a safe loan for first-time buyers.
30-Year Fixed Mortgage
30-year fixed-rate mortgages are one of the most popular loan options available. They are also pretty standard when it comes to home buying, especially if you plan to spend the next 30 or more years in your home. The payment is intended to be low and drawn out over 30-years, and the rate will never change. If you are set on your dream home and don’t plan to move for quite some time, 30-year fixed mortgages are good options.
15-Year Fixed Mortgage
If you are able to make higher payments than those offered in a 30-year fixed mortgage, and want to pay off your loan quicker, consider a 15-year fixed mortgage. The same rules apply as with the 30-year, except the interest will be less over the course of your entire loan. This means that while you may be paying more monthly, over the course of the loan you will be paying less.
VA Loans
If you have served your country, you should qualify for great rates for housing. With this in mind, The U.S. Department of Veterans Affairs guarantees mortgages made by qualified lenders to help home buyers find low VA rates. If you request a loan from the VA, you will be issued a certificate that will help you find a great VA loan. Furthermore, you can use LowVARates.com to find great deals for service men and women who have served the country.
Adjustable Rate Mortgage
If you are thinking you may be moving within 10-years, or you simply are looking tor educe the cost of your mortgage, an adjustable rate mortgage could be the best option for you. Upon selecting an adjustable rate mortgage, you will be given the lowest rate possible during your introductory period. After that, your rates may change up to once per year. If you are financially savvy and have a good eye for the market, an adjustable rate mortgage can be great option.
Buying your first home should be an enjoyable experience. You should be building and making memories with your friends and family that last a lifetime. In order to have less of a financial burden that will allow you to do these great things, consider your financial well being and then evaluate which of the options on this list may be best for you.