Finding the Right Home Loan For You
One of the biggest decisions you make when buying a home is the type of home loan that you will choose. While there are several types available, each one can be changed based on the home you're looking for, or your financial situation. Before you get too confused about the varying types of loans that are out there, The Mike MacGuire Team would like to help you know what your options are.
There are a few popular mortgage options in the United States, and the basic qualification information and down payments are a good place to start when researching what's best for you and your next home!
What is a Mortgage?
Before we get in too deep, we want to pose the question: What is a mortgage? This is the first place to start, after all, when you're buying a home.
A mortgage is a loan that a bank or mortgage lender will give you to fund the purchase of your home. You generally want to only borrow 80% of the home's value - which means you'll want to try to put 20% down if possible. The house you purchase then become collateral in exchange for the money that you are borrowing. A mortgage is normally paid on a month basis and it is comprised of your principal, interest, taxes, and insurance.
Conventional
A conventional loan is one of the most popular loans out there, usually because it has the best interest rates. Because it has good interest rates, you have to have a good credit score, a stable income because these loans are designed for buyers who will be good borrowers. Another advantage to a conventional loan is that there are no MIP (mortgage insurance premiums) required on your loan because you are ideally putting the 20% down. 20% is the standard down payment, but some conventional loans will accept 10% at the minimum.
FHA
A Federal Housing Administration loan is available to make home ownership more affordable, and easier because it requires less of a down payment and has easier credit requirements. It's a great option for first-time homebuyers in Colorado Springs as well. One reason an FHA loan is so popular is because of the lower credit requirements, with some home owners purchasing a home with a credit score as low as 580. There is also a lower downpayment required, sometimes as low as 3.5%, which is quite a difference from the standard 20%. This loan makes it easier for you to purchase the home of your dreams even if large down payments aren't available to you.
VA
A VA loan stands for Veteran Affairs. This loan takes away the need for a down payment without the risk of mortgage insurance - but it's only available to veterans. This is a perfect loan option for someone who has served our country. Of course, don't forget that the Mike MacGuire team also provides a Military Cashback Service, because we want to provide the peace of mind for you and your family when buying a Colorado Springs home.
USDA
United States Department of Agriculture developed a loan to help promote the purchase of rural land. This loan has a minimum of 0% down and is a great option for investors, or those who are looking to get involved in agriculture. Yu do have to remember, though, that because it's a government loan, there are requirements that you have to meet in order to successfully secure this loan. Not all homes will fit into the stipulations that is has laid out. You'll want to work closely with your mortgage company and your Colorado Springs real estate agent to determine the best home for you.
ARM
This is an Adjustable Rate Mortgage. While the conventional and FHA loans are generally fixed rate mortgages (meaning that the mortgage rate does not adjust throughout the time you pay off your loan) an ARM can have extremely low rates to start with, but often fluctuate with the market. While we have benefitted from having low mortgage rates in the past, there is no way to predict that these rates will continue to stay low, so an ARM loan can be a bit of a gamble - and not always in your favor. They do, however, only require a minimum of 10% down, and can be good for any interested buyers.
Colorado Springs Real Estate
Armed with information, we hope that you can go forward making the best decision for you when buying your home. There are many loans available, but each one has perks and disadvantages depending on your financial situation or the type of home you plan to purchase. If you have already secured your loan type and you're just trying to find the home of your dreams, we invite you to contact us. We have been involved in real estate for over twenty-five years and we would love to put our expertise to work for you.
There are a few popular mortgage options in the United States, and the basic qualification information and down payments are a good place to start when researching what's best for you and your next home!
Before we get in too deep, we want to pose the question: What is a mortgage? This is the first place to start, after all, when you're buying a home.
A mortgage is a loan that a bank or mortgage lender will give you to fund the purchase of your home. You generally want to only borrow 80% of the home's value - which means you'll want to try to put 20% down if possible. The house you purchase then become collateral in exchange for the money that you are borrowing. A mortgage is normally paid on a month basis and it is comprised of your principal, interest, taxes, and insurance.
Popular Mortgage Options
Conventional
A conventional loan is one of the most popular loans out there, usually because it has the best interest rates. Because it has good interest rates, you have to have a good credit score, a stable income because these loans are designed for buyers who will be good borrowers. Another advantage to a conventional loan is that there are no MIP (mortgage insurance premiums) required on your loan because you are ideally putting the 20% down. 20% is the standard down payment, but some conventional loans will accept 10% at the minimum.
FHA
A Federal Housing Administration loan is available to make home ownership more affordable, and easier because it requires less of a down payment and has easier credit requirements. It's a great option for first-time homebuyers in Colorado Springs as well. One reason an FHA loan is so popular is because of the lower credit requirements, with some home owners purchasing a home with a credit score as low as 580. There is also a lower downpayment required, sometimes as low as 3.5%, which is quite a difference from the standard 20%. This loan makes it easier for you to purchase the home of your dreams even if large down payments aren't available to you.
VA
A VA loan stands for Veteran Affairs. This loan takes away the need for a down payment without the risk of mortgage insurance - but it's only available to veterans. This is a perfect loan option for someone who has served our country. Of course, don't forget that the Mike MacGuire team also provides a Military Cashback Service, because we want to provide the peace of mind for you and your family when buying a Colorado Springs home.
USDA
United States Department of Agriculture developed a loan to help promote the purchase of rural land. This loan has a minimum of 0% down and is a great option for investors, or those who are looking to get involved in agriculture. Yu do have to remember, though, that because it's a government loan, there are requirements that you have to meet in order to successfully secure this loan. Not all homes will fit into the stipulations that is has laid out. You'll want to work closely with your mortgage company and your Colorado Springs real estate agent to determine the best home for you.
ARM
This is an Adjustable Rate Mortgage. While the conventional and FHA loans are generally fixed rate mortgages (meaning that the mortgage rate does not adjust throughout the time you pay off your loan) an ARM can have extremely low rates to start with, but often fluctuate with the market. While we have benefitted from having low mortgage rates in the past, there is no way to predict that these rates will continue to stay low, so an ARM loan can be a bit of a gamble - and not always in your favor. They do, however, only require a minimum of 10% down, and can be good for any interested buyers.
Armed with information, we hope that you can go forward making the best decision for you when buying your home. There are many loans available, but each one has perks and disadvantages depending on your financial situation or the type of home you plan to purchase. If you have already secured your loan type and you're just trying to find the home of your dreams, we invite you to contact us. We have been involved in real estate for over twenty-five years and we would love to put our expertise to work for you.
Mike MacGuire
Colorado Springs Real Estate Agent
The MacGuire Team
6760 Corporate Dr
Ste 300
Colorado Springs, CO 80919
719-536-4324 or 719-660-6793
Mike@BuyWithMike.com
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