{"id":258,"date":"2023-04-18T19:52:12","date_gmt":"2023-04-18T19:52:12","guid":{"rendered":"https:\/\/blogunitedpurpose.azurewebsites.net\/?p=258"},"modified":"2024-08-05T19:22:44","modified_gmt":"2024-08-05T19:22:44","slug":"potential-homebuyer-take-a-look-at-your-mortgage-options","status":"publish","type":"post","link":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/potential-homebuyer-take-a-look-at-your-mortgage-options\/","title":{"rendered":"Potential Homebuyer? Take a look at Your Mortgage Options"},"content":{"rendered":"\n<p>Understanding the Pros and Cons of Each Along with 5 Different Types of Mortgage Loans + Options Best for You<\/p>\n\n\n\n<p>Congrats! If you\u2019re coming across this article you might be planning out one of the biggest purchases you\u2019ll ever make &#8211; the first home. It\u2019s important to plan out the process carefully, to ensure you find the best home that caters best to your financial state. If you plan to finance the purchase of a home, you will need to look at all the available mortgage options.&nbsp;<\/p>\n\n\n\n<p>A mortgage is defined as an agreement between you and a lender, where the lender can legally take your property away if you fail to pay back the money that you have borrowed. Mortgage loans can be used to purchase a home or borrow money against the value of a home someone already owns. Check out these important things to look out for when you\u2019re exploring available mortgage options:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The size of the loan.<\/li>\n\n\n\n<li>The interest rate and associated points.<\/li>\n\n\n\n<li>The closing costs of the loan and the lender\u2019s fees.<\/li>\n\n\n\n<li>The Annual Percentage Rate (APR).<\/li>\n\n\n\n<li>The type of interest rate and whether it\u2019s fixed or adjustable.<\/li>\n\n\n\n<li>The loan term: How long you have to repay the loan.<\/li>\n\n\n\n<li>Whether the loan has features such as a prepayment penalty, a balloon clause, an interest-only feature, or negative amortization. These features can be risky and should be avoided if possible.<\/li>\n<\/ul>\n\n\n\n<p>Remember to think carefully when the lenders know how much money you are qualified to borrow. How much you\u2019re qualified to borrow is different from how much you\u2019re actually going to be able to repay, because you still need to leave room in your budget for other important expenses.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Types of Mortgages<\/strong><\/h2>\n\n\n\n<p>The 5 most common types of home mortgage loans include the conventional, jumbo, government-insured, fixed-rate, and adjustable-rate mortgage. Continue reading to learn more about the pros and cons of each whether or not they may be the best option for your personal circumstances.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Conventional Loans<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.consumerfinance.gov\/owning-a-home\/loan-options\/conventional-loans\/\">Conventional loans<\/a> come in two forms that include conforming and non-conforming. Conventional loans are not backed by the federal government.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Conforming loans: A conforming loan conforms to the standards set by the <a href=\"https:\/\/www.fhfa.gov\/\">Federal Housing Finance Agency<\/a> (FHFA). These standards include credit, debit, and loan size, and can reach almost $1 million in expensive areas!<\/li>\n\n\n\n<li>Non-conforming loans: These loans cater to borrowers who are looking to purchase more expensive homes.<\/li>\n<\/ul>\n\n\n\n<p>Pros of Conventional Loans:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Used for a primary home, second home, or investment property.<\/li>\n\n\n\n<li>Overall borrowing costs are usually lower than other types of mortgages, even if interest rates are slightly higher.<\/li>\n\n\n\n<li>You can cancel the <a href=\"https:\/\/www.bankrate.com\/mortgages\/basics-of-private-mortgage-insurance-pmi\/\">private mortgage insurance (PMI)<\/a> once you\u2019ve reached 20 percent equity.<\/li>\n\n\n\n<li>Pay as little as 3 percent down on loans backed by <a href=\"https:\/\/www.fanniemae.com\/\">Fannie Mae<\/a> or <a href=\"https:\/\/www.freddiemac.com\/\">Freddie Mac<\/a>.<\/li>\n\n\n\n<li>Sellers can contribute to <a href=\"https:\/\/www.bankrate.com\/mortgages\/what-are-closing-costs\/\">closing cost<\/a>s.<\/li>\n<\/ul>\n\n\n\n<p>If you have a solid credit score and can afford a higher down payment, a conventional mortgage could be right for you. The 30-year, fixed-rate conventional mortgage is among the most popular choices for homebuyers. It\u2019s important to note that you may need to pay PMI if your down payment is at least 20 percent less than the sales price.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-instagram wp-block-embed-instagram\"><div class=\"wp-block-embed__wrapper\">\nhttps:\/\/www.instagram.com\/p\/CdW7t9JMC6t\/?utm_source=ig_embed&#038;amp%3Butm_campaign=loading\n<\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Jumbo Loans<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.nerdwallet.com\/article\/mortgages\/jumbo-loans-what-you-need-to-know\">Jumbo loans<\/a> are most common in areas that are higher-cost such as Los Angeles, New York, and Hawaii.&nbsp;<\/p>\n\n\n\n<p>Pros of Jumbo Loans:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Can borrow more money to purchase a more expensive home<\/li>\n\n\n\n<li><a href=\"https:\/\/www.bankrate.com\/mortgages\/jumbo-loan-rates\/\">Interest rates on jumbo loans<\/a> tend to be <a href=\"https:\/\/www.bankrate.com\/mortgages\/jumbo-vs-conventional-loans\/\">competitive with other conventional loans<\/a><\/li>\n\n\n\n<li>Using a jumbo loan may be the only way for some borrowers to gain homeownership in areas that have higher home values<\/li>\n<\/ul>\n\n\n\n<p>Those who wish to receive a jumbo loan must have significant assets in cash\/savings accounts, along with a down payment of at least 10 to 20 percent. It\u2019s safe to say this loan is best for those who have a decent amount of money in savings!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Government-Insured Loan<\/strong><\/h3>\n\n\n\n<p>Three government agencies currently back mortgages. These agencies include the <a href=\"https:\/\/www.hud.gov\/program_offices\/housing\/fhahistory\">Federal Housing Administration<\/a> (FHA), the <a href=\"https:\/\/www.usa.gov\/federal-agencies\/u-s-department-of-agriculture\">U.S. Department of Agriculture<\/a> (USDA) and the <a href=\"https:\/\/www.usa.gov\/federal-agencies\/u-s-department-of-veterans-affairs\">U.S. Department of Veterans Affairs<\/a> (VA).<\/p>\n\n\n\n<p>Pros of <a href=\"https:\/\/www.atlanticbay.com\/knowledge-center\/government-insured-loans-4-advantages-that-make-them-different\">Government-insured Loans<\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Help you finance a home when you <a href=\"https:\/\/www.bankrate.com\/mortgages\/fha-vs-conventional-loans\/\">don\u2019t qualify for a conventional loan<\/a><\/li>\n\n\n\n<li>Credit requirements are not as strict<\/li>\n\n\n\n<li>Large down payment not required&nbsp;<\/li>\n\n\n\n<li>Available to repeat and <a href=\"https:\/\/www.bankrate.com\/mortgages\/first-time-homebuyer-guide\/\">first-time buyers<\/a><\/li>\n\n\n\n<li>No mortgage insurance and no down payment required for VA loans<\/li>\n<\/ul>\n\n\n\n<p>If you have trouble with a low credit score or qualifying for a conventional loan, a government-insured loan may be your best option.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-instagram wp-block-embed-instagram\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"instagram-media\" data-instgrm-captioned data-instgrm-permalink=\"https:\/\/www.instagram.com\/reel\/CfWuILyjfnE\/?utm_source=ig_embed&amp;utm_campaign=loading\" data-instgrm-version=\"14\" style=\" background:#FFF; border:0; border-radius:3px; box-shadow:0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width:658px; min-width:326px; padding:0; width:99.375%; width:-webkit-calc(100% - 2px); width:calc(100% - 2px);\"><div style=\"padding:16px;\"> <a href=\"https:\/\/www.instagram.com\/reel\/CfWuILyjfnE\/?utm_source=ig_embed&amp;utm_campaign=loading\" style=\" background:#FFFFFF; line-height:0; padding:0 0; text-align:center; text-decoration:none; width:100%;\" target=\"_blank\"> <div style=\" display: flex; flex-direction: row; align-items: center;\"> <div style=\"background-color: #F4F4F4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;\"><\/div> <div style=\"display: flex; flex-direction: column; flex-grow: 1; justify-content: center;\"> <div style=\" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;\"><\/div> <div style=\" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;\"><\/div><\/div><\/div><div style=\"padding: 19% 0;\"><\/div> <div style=\"display:block; height:50px; margin:0 auto 12px; width:50px;\"><svg width=\"50px\" height=\"50px\" viewBox=\"0 0 60 60\" version=\"1.1\" xmlns=\"https:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"https:\/\/www.w3.org\/1999\/xlink\"><g stroke=\"none\" stroke-width=\"1\" fill=\"none\" fill-rule=\"evenodd\"><g transform=\"translate(-511.000000, -20.000000)\" fill=\"#000000\"><g><path d=\"M556.869,30.41 C554.814,30.41 553.148,32.076 553.148,34.131 C553.148,36.186 554.814,37.852 556.869,37.852 C558.924,37.852 560.59,36.186 560.59,34.131 C560.59,32.076 558.924,30.41 556.869,30.41 M541,60.657 C535.114,60.657 530.342,55.887 530.342,50 C530.342,44.114 535.114,39.342 541,39.342 C546.887,39.342 551.658,44.114 551.658,50 C551.658,55.887 546.887,60.657 541,60.657 M541,33.886 C532.1,33.886 524.886,41.1 524.886,50 C524.886,58.899 532.1,66.113 541,66.113 C549.9,66.113 557.115,58.899 557.115,50 C557.115,41.1 549.9,33.886 541,33.886 M565.378,62.101 C565.244,65.022 564.756,66.606 564.346,67.663 C563.803,69.06 563.154,70.057 562.106,71.106 C561.058,72.155 560.06,72.803 558.662,73.347 C557.607,73.757 556.021,74.244 553.102,74.378 C549.944,74.521 548.997,74.552 541,74.552 C533.003,74.552 532.056,74.521 528.898,74.378 C525.979,74.244 524.393,73.757 523.338,73.347 C521.94,72.803 520.942,72.155 519.894,71.106 C518.846,70.057 518.197,69.06 517.654,67.663 C517.244,66.606 516.755,65.022 516.623,62.101 C516.479,58.943 516.448,57.996 516.448,50 C516.448,42.003 516.479,41.056 516.623,37.899 C516.755,34.978 517.244,33.391 517.654,32.338 C518.197,30.938 518.846,29.942 519.894,28.894 C520.942,27.846 521.94,27.196 523.338,26.654 C524.393,26.244 525.979,25.756 528.898,25.623 C532.057,25.479 533.004,25.448 541,25.448 C548.997,25.448 549.943,25.479 553.102,25.623 C556.021,25.756 557.607,26.244 558.662,26.654 C560.06,27.196 561.058,27.846 562.106,28.894 C563.154,29.942 563.803,30.938 564.346,32.338 C564.756,33.391 565.244,34.978 565.378,37.899 C565.522,41.056 565.552,42.003 565.552,50 C565.552,57.996 565.522,58.943 565.378,62.101 M570.82,37.631 C570.674,34.438 570.167,32.258 569.425,30.349 C568.659,28.377 567.633,26.702 565.965,25.035 C564.297,23.368 562.623,22.342 560.652,21.575 C558.743,20.834 556.562,20.326 553.369,20.18 C550.169,20.033 549.148,20 541,20 C532.853,20 531.831,20.033 528.631,20.18 C525.438,20.326 523.257,20.834 521.349,21.575 C519.376,22.342 517.703,23.368 516.035,25.035 C514.368,26.702 513.342,28.377 512.574,30.349 C511.834,32.258 511.326,34.438 511.181,37.631 C511.035,40.831 511,41.851 511,50 C511,58.147 511.035,59.17 511.181,62.369 C511.326,65.562 511.834,67.743 512.574,69.651 C513.342,71.625 514.368,73.296 516.035,74.965 C517.703,76.634 519.376,77.658 521.349,78.425 C523.257,79.167 525.438,79.673 528.631,79.82 C531.831,79.965 532.853,80.001 541,80.001 C549.148,80.001 550.169,79.965 553.369,79.82 C556.562,79.673 558.743,79.167 560.652,78.425 C562.623,77.658 564.297,76.634 565.965,74.965 C567.633,73.296 568.659,71.625 569.425,69.651 C570.167,67.743 570.674,65.562 570.82,62.369 C570.966,59.17 571,58.147 571,50 C571,41.851 570.966,40.831 570.82,37.631\"><\/path><\/g><\/g><\/g><\/svg><\/div><div style=\"padding-top: 8px;\"> <div style=\" color:#3897f0; font-family:Arial,sans-serif; font-size:14px; font-style:normal; font-weight:550; line-height:18px;\">View this post on Instagram<\/div><\/div><div style=\"padding: 12.5% 0;\"><\/div> <div style=\"display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;\"><div> <div style=\"background-color: #F4F4F4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);\"><\/div> <div style=\"background-color: #F4F4F4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;\"><\/div> <div style=\"background-color: #F4F4F4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);\"><\/div><\/div><div style=\"margin-left: 8px;\"> <div style=\" background-color: #F4F4F4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;\"><\/div> <div style=\" width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg)\"><\/div><\/div><div style=\"margin-left: auto;\"> <div style=\" width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);\"><\/div> <div style=\" background-color: #F4F4F4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);\"><\/div> <div style=\" width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);\"><\/div><\/div><\/div> <div style=\"display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;\"> <div style=\" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;\"><\/div> <div style=\" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;\"><\/div><\/div><\/a><p style=\" color:#c9c8cd; font-family:Arial,sans-serif; font-size:14px; line-height:17px; margin-bottom:0; margin-top:8px; overflow:hidden; padding:8px 0 7px; text-align:center; text-overflow:ellipsis; white-space:nowrap;\"><a href=\"https:\/\/www.instagram.com\/reel\/CfWuILyjfnE\/?utm_source=ig_embed&amp;utm_campaign=loading\" style=\" color:#c9c8cd; font-family:Arial,sans-serif; font-size:14px; font-style:normal; font-weight:normal; line-height:17px; text-decoration:none;\" target=\"_blank\">A post shared by U.S. Department of Agriculture (@usdagov)<\/a><\/p><\/div><\/blockquote><script async src=\"\/\/platform.instagram.com\/en_US\/embeds.js\"><\/script>\n<\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Fixed-Rate Mortgage&nbsp;<\/strong><\/h3>\n\n\n\n<p>With a <a href=\"https:\/\/www.bankofamerica.com\/mortgage\/fixed-rate-mortgage-loans\/\">fixed-rate mortgage,<\/a> your monthly mortgage payment will always stay the same! The same interest rate is maintained over the life of the loan, and these loans typically will come in either 15 or 30 years. A fixed-rate mortgage is best for those who plan to stay in the home for at least five to seven years, making it easier to budget housing expenses through the months.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Adjustable-rate Mortgage<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.rocketmortgage.com\/learn\/adjustable-rate-mortgage\">Adjustable-rate mortgages<\/a> (ARM) come with interest rates that fluctuate, depending on the market conditions. Typically, ARM products will come with a fixed interest rate for a few years before a variable interest rate is set for the remainder of the term. You need to consider the amount your rate could potentially increase before you consider an ARM in your circumstance.<\/p>\n\n\n\n<p>Pros of a ARM:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lower possible fixed rate in the first few years of homeownership<\/li>\n\n\n\n<li>Substantial amount of money can be saved on interest payments<\/li>\n<\/ul>\n\n\n\n<p>Contrary to a fixed-rate mortgage, an ARM is best for people who don\u2019t plan to stay in the home for more than a few years. It\u2019s important to remember that there\u2019s no guarantee of a price for the monthly mortgage payments, so they could become unaffordable for you.&nbsp;<\/p>\n\n\n\n<p>Purchasing a home is a great achievement for many, with a new feel of pride and freedom. Take the time to do your research beforehand, and consider meeting with a mortgage broker to help you get through the process. Good luck!<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"tmnf_excerpt\">Understanding the Pros and Cons of Each Along with 5 Different Types of Mortgage Loans + Options Be\u2026<\/div>","protected":false},"author":6,"featured_media":259,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"footnotes":""},"categories":[31],"tags":[],"class_list":["post-258","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage"],"jetpack_featured_media_url":"\/wp-content\/uploads\/Blog-17.jpg","_links":{"self":[{"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/posts\/258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/comments?post=258"}],"version-history":[{"count":2,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/posts\/258\/revisions"}],"predecessor-version":[{"id":373,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/posts\/258\/revisions\/373"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/media\/259"}],"wp:attachment":[{"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/media?parent=258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/categories?post=258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.unitedpurposemortgage.com\/index.php\/wp-json\/wp\/v2\/tags?post=258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}