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Homebuyer Guide: What is the Best Mortgage for Me?

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Can’t wait for that home sweet home that you have been dreaming of? Here at Coldwell Banker Traditions, I can make buying a home easy. I listed below the most helpful home buying tips for you when it comes to finding the best mortgage that suits you.

A mortgage is a home loan that you borrow with a particular interest rate for a specific number of years. It is quite the notion to say that your mortgage will be most likely the biggest debt that you will have in your life. With that in mind, this homebuyer guide will help you in understanding the basics of mortgage plans and how mortgages work for you to avoid financial trouble in the long run.

‘What is the Best Mortgage for Me?’

The answer to this question depends on what kind of loan you can actually afford and can meet your needs. There are a variety of options that you can select from. So, when choosing for the best mortgage loan, ask yourself these questions:

  • What kind of loan do I need?

  • What type of loan structure can I commit to pay?

  • How long do I want to spend paying my mortgage?

You read that right, paying your mortgage is a commitment; you got to be responsible enough because you will be paying it for years – and you are bound with legalities here.

We know that it can be a little bit overwhelming from finding waterfront homes for sale in Williamsburg VA and now finding the best mortgage deal for you, but we are here to help you.

Here are the top-most mortgage loans that you can choose from.

Conventional Home Loan

This type of mortgage is the most common home loan basically because it offers amazing rates, flexible terms and various down payment options. Conventional home loan is not guaranteed or insured by the federal government; rather these are mortgages complying with a set of guidelines by Fannie Mae and Freddie Mac. This is the reason why conventional mortgages are also called ‘conforming loans’ with most lenders from private banks, mortgage companies and credit unions across the country offering these loans.

You need to ensure that you have a good credit score to qualify for this loan, as requirements can be more rigorous. Good credit score is generally above at a 660 and higher. You can get approved with as little as 3-5% down payment but you will find it more beneficial with a 20% down payment with waived Private Mortgage Insurance policy.

This type of home loan is available for the property you plan to occupy for yourself, your second home or your investment property. It can come in fixed rates, adjustable rates or hybrids with loan terms ranging from 10 to 30 years. Conventional home loan comes with its own unique value proposition like mortgage insurance can be cancelled with a 20% home equity and home loan amounts up to $510,400 and above depending on location.

FHA Home Loans

Federal Housing Administration (FHA) Home Loans are most popular with first-time home buyers looking for lower down payment and a more leniency in credit history and income qualification. This mortgage only requires a 3.5% down payment with a credit score as low as 580. It can be applied for your primary residence, but not on investment property.

VA Home Loans

This type of mortgage is designed to help Veterans, home buyers with eligible military service history and connections like surviving spouses and service members become homeowners. VA home loans, guaranteed by the U.S. Department of Veterans Affairs, offers no down payment options, no mortgage insurance, affordable mortgages rates, fixed terms for 15- or 30-years and leniency on credit scores.

‘More Mortgage Options for Me’

There are still other different types of home loans that can be very specific and targeted. Among these are the USDA mortgages which are for home buyers planning to live in rural and suburban areas.  Another is the Jumbo Home Loans, which are conventional types that exceed the standard threshold amount. This loan is usually for home properties located in high-priced counties. There is also this type of loan if you plan to live in your property for less than a 10-year period. It is called the Adjustable-Rate Mortgages (ARM) home loan which allows you to get a super-low rate for up to 10 years.

Buying a home is quite challenging for first-timers–I hope that these home buying tips helped you get started. For more information on real estate and waterfront homes for sale in Williamsburg, VA, ask the experts. Get in touch with Coldwell Banker Traditions at 757.229.9595 or info(at)cbtraditions(dotted)com today.