Posts tagged home loan
FHA 5/1 ARM: FHA 5/1 Adjustable Rate Mortgage in Home Loans

A FHA 5/1 ARM is a kind of hybrid mortgage in which interest rates remain fixed for a 5-year period, but can then increase after that due to changes in market interest rates. Unlike regular ARMs, an FHA 5/1 ARM is insured by the government, which can give you some serious benefits.

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What is an interest only loan?

An interest-only loan is a mortgage in which a borrower only pays the interest (not the principal) on their loan for a set period of time, usually between 5 and 10 years. Then, the borrower will either begin paying down the principal, make a lump sum payment, or sell the house.

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What Credit Score Do You Need to Get a Home Equity Loan?

Can you get a home equity loan with a bad credit score? You’re hoping so, now. When you bought your house, the pink bathroom was cute and retro, but after living with it for years, you’re about ready to spray paint the whole thing just to get a break. But with bad credit, what are your options when it comes to renovating?

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Finding Home Equity Loans with Bad Credit

When the going gets tough, sometimes, the tough get a home equity loan. There are always going to be times in life when you could use an injection of cash, whether that’s because you’re trying to breathe life into a startup, needing to update your kitchen, or you just got a little behind on bills. A home equity loan can be an excellent weapon in your life improvement war, but if your credit is on the poor side, it can make finding a home equity loan tricky.

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What Is Jumbo Adjustable Rate Mortgage Loan?

An ARM jumbo loan is an adjustable rate mortgage that exceeds the Fannie Mae and Freddie Mac loan-servicing limits. This amount, for most American counties, is $453,100. For more expensive areas, that limit can go as high as $679,650. Right now, ARM jumbo loans are becoming incredibly popular -- with statistics suggesting that around 75% of ARMs currently issued are actually for jumbo loans. Of that 75%, 47% of those home loans are for more than $1 million.

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FHA 7/1 ARM: FHA 7/1 Adjustable Rate Mortgage in Home Loans

An FHA 7/1 ARM is a kind of hybrid home loan that’s insured by the Federal Housing Administration (FHA). If you get a FHA 7/1 ARM, your interest rate will be fixed for the first seven years of the loan, and can then be adjusted afterward when the variable interest rate portion of the loan begins. Like other ARMs, FHA 7/1 ARM variable interest rates are based on a index rate -- which is usually the rate at which banks in a certain area lend money to each other.

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3/1 ARM: 3/1 Adjustable Rate Mortgage in Home Loans

A 3/1 ARM is an adjustable-rate mortgage in which the rate is fixed for the first three years of the loan. As a hybrid mortgage, it has elements of both a traditional fixed-rate mortgage and an adjustable (or variable) rate loan. As with pretty much all hybrid rate mortgages, the shorter the period of the fixed-rate part of the loan, the lower the initial interest rate. That’s the bank’s way of compensating you for the increased risk you’re taking on when the adjustable part of the mortgage kicks in.

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10/1 ARM: 10/1 Adjustable Rate Mortgage in Home Loans

A 10/1 ARM is one type of hybrid adjustable-rate mortgage. Much like other hybrid loans, a 10/1 ARM has a fixed period (in this case, 10 years) during which your interest rate won’t change. That makes it one of the safest types of hybrid mortgages, as it gives you a lot of time to figure out your financial situation and determine whether you want to continue owning your home after the adjustable-rate period begins.

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First-Time Home Buyer Down Payments

Regular loans usually require a 20% down payment on a home. First-time homebuyer programs like the FHA loan reduce this to as low as 3.5%.

The amount can vary according to the program on offer and to what extent you qualify for the grant.

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How to Get a Home Loan

Financing your home is a large investment, which is why most people need long-term loans to buy a home. Before searching for a home to buy or financing options, first get a good idea of your financial standing. Buying a home is a huge financial obligation, so ensure that:

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