A home loan is a great form of financial assistance if you are short on cash, or are not in favor of liquidating your savings and buying new ones, as it gives you the option of having your cash available to you in an emergency. It is also a good form of insurance in the event of a bankruptcy and/or foreclosure.
The first thing I want to stress in this post is that there are many options available to you when it comes to obtaining a home loan. There are different types of loans available, like traditional, REO, FHA, VA and I believe to be in the near future, even private mortgage backed securities (PMBS). It really is best to start by getting the basics down before moving to more complicated options. That is why I am going to give you a primer on home loans and give you a basic understanding of the different types of loans available for obtaining a home loan.
When it comes to home loans, there are a number of types that can be considered as being on the same level. There are two main types of loans; a home equity line of credit (HELOC) and a loan backed by your house. Before you choose one of them, be sure to answer the question of “how much home can i afford“?
HELOCs
This is the most common type of home loan and usually has a monthly payment of between 3% and 5%. Because the amount is so low, you may want to think twice about taking out this type of loan. HELOCs often require that you are paying for at least 30 years and sometimes require a down payment. HELOCs are typically best suited for people who don’t own a lot of land and have a lot of flexibility with their monthly payments. FHA Loans FHA loans are generally a little higher in monthly payments than HELOCs but come with an extra perk: you can take out a FHA loan with a down payment. FHA loans are also preferred by people who don’t own a home.
HELOCs vs. FHA vs. VA Loans: Which Is Best For You?
The biggest advantage of any type of home loan is to have a steady income to pay off the loan each month. That’s how you will pay down the loan early enough to make it a good credit risk. The best way to get a loan for your home purchase is to get an appraisal. A good appraiser will give you a better idea of the home’s value and will help you get a mortgage. Here are a few things to consider before you get an appraisal: The appraiser will check to see if the home meets local zoning laws.
An appraiser may look at other houses in the area to see if the area is good for development.
A good appraiser will also conduct an extensive home inspection. A lot of buyers find an appraisal too intimidating to be worth their time. If you decide that you want an appraisal, it’s best to contact a reputable appraiser before you buy.
The price of a house is only part of your decision to purchase a home. Another important consideration is the location and character of the area in which you live. For example, if you live in an area that has lots of shopping centers, parks, schools, and services such as hospitals and parks, then your price will be considerably lower.