The dream of home ownership is fast becoming a reality for a lot of families across the country; thanks to a variety of available home purchase loans which makes this possible. A purchase mortgage loan is a loan that is used to purchase a real estate property. The property can be anything from a primary residence, vacation or second home to an investment property.
Types of Purchase Loans
Gone are the days when the only loan options that were available to buyers included conventional or FHA loans. The purchase loan options of today include, but are not limited to, the following:
If you have served or are currently serving in the US military, you can apply for a VA home loan to purchase a property in the Austin area. The VA home loan program makes homeownership a reality for the spouses of deceased army veterans as well. The VA home loan program has very specific eligibility requirements. For example, whether a person qualifies for the program will depend on the veteran’s length of service.
FHA loans are mortgage loans insured by the Federal Housing Authority. However, like other the loan programs in Texas, FHA loans can only be acquired through an FHA approved lender. One of the biggest advantages of FHA loans are the minimal requirements that concern down payments. In addition, a borrower’s FICO score is pretty lenient when it comes to acquiring an FHA loan.
USDA Guaranteed Home Loans
USDA Guaranteed Home Loans are residential mortgage loans extended to qualified borrowers to purchase a property in a qualifying area that’s considered rural or suburban. The USDA encourages growth in the rural parts of the country or outside the main city limit where the Federal Housing Administration (FHA) is not actively insuring mortgage loans.
There are certain guidelines and requirements that a borrower must meet in order to be eligible for a USDA loan. The three (3) basic criteria for qualifying are:
- (a) credit,
- (b) income, and
- (c) asset requirements, respectively.
After qualifying, the borrower must also purchase a home that’s within the USDA designated qualified area. To see and check is a property is eligible for USDA Guaranteed Home Loan financing, you can click here.
Fixed Rate Mortgages
The fixed rate mortgage still reigns supreme even after all these years. It is the most commonly used type that buyers opt for. It is easy to see why. You can get a fixed rate mortgage loan ten to thirty years and anything else in between, depending on your requirements, financial status or plans for the future.
The interest rate for a fixed rate mortgage loan stays the same for its entire term. You know exactly how much payment is every month.
Adjustable Rate Mortgages
An adjustable rate mortgage loan is a lucrative option for some borrowers, especially, the smart investor. Unlike a fixed rate mortgage, an ARM’s (adjustable rate mortgage) interest rate keeps changing on an annual basis. An ARM is also known as a hybrid product since its rate changes after remaining fixed for a certain period of time. Such a situation gives a borrower the chance to purchase a home by taking advantage of a variety of indexes.
For example, a 3/1 ARM mortgage loan carries a fixed rate for the first three years. After three years, the loan’s interest rate will continue to fluctuate on a yearly
basis. Unfortunately, borrowers only know when the rate will adjust and not how. Plus, all ARM loans carry caps. The caps can also change on a monthly basis and through the life of the loan after you purchase a home.
Our Loan Specialists at Core Lending can assist you and guide you through your home loan purchase by helping you choose the loan option that best suits your situation, plans, preferences, and finances.
Prequalification is the first step in home ownership. By completing the loan prequalification request our specialists will be able to let you know how much you can afford and what your estimated monthly payment will be. Our team will also help you identify the eligible loans near you.