Types of Home Loans
When you’re buying a home for sale in Lakewood or Long Beach, you’ll probably need a mortgage loan - most people do. But what are the most common types of loans, and what are they for? This post will guide you so you can make the best decisions.
Types of Home Loans
The most common types of home loans are:
Fixed-rate loans are those in which the interest rate stays the same throughout the loan’s life. Usually, these loans last for 15 to 30 years, although fixed-rate loans of shorter duration (such as 10 years) are also available. If your interest rate is 3.5 percent when you buy, it’ll be 3.5 percent when you make your final payment.
Adjustable rate loans offer an introductory interest rate that’s typically lower than what you’d get with a fixed-rate loan. However, after the introductory period is over (usually 2 to 10 years), you’ll begin paying interest based on what current rates are when it adjusts. Every year, your mortgage payments will change.
FHA loans are designed for low-income home buyers. They’re backed by the Federal Housing Administration, and they often allow buyers to put down as little as 3.5 percent to buy a home.
VA loans are only available to members (or former members) of the U.S. Armed Forces, some qualifying spouses, and a handful of government employees. The Veterans Administration guarantees the loan, which reduces the lender’s risk, and they don’t require a down payment at all. You don’t have to pay for private mortgage insurance on a VA loan, either.
USDA loans, backed by the U.S. Department of Agriculture, are designed for people who are buying a home in a town with a population of 10,000 or fewer people (so they’re not really available in Lakewood or Long Beach!). These loans allow buyers to put nothing down, as well.
Jumbo loans are mortgages above the normal limit for government-sponsored loans. That’s subject to change each year.
Are You Selling a Home in Lakewood or Long Beach?
If you’re selling a home in Lakewood or Long Beach, we can help. Call us at 562-882-1581 to find out how we’ll market your house to all the right buyers so you can sell it quickly and at the right price.