Let this article be a congratulations to you if you’re one who’s finally made up their mind on purchasing a house. Houses are huge investments and, when taken care of properly and wisely, can benefit you tenfold in the future. If you’re currently in the market checking out homes, it is wise to see what loan best supports what kind of abode you wish to inhabit.
Unless you have hundreds of thousands at your disposal waiting to be spent, a loan can be your best friend. Contrary to the stigma, mortgage loans shouldn’t be an inconvenience to you. This is exactly the reason it’s best for one to research, read up, and save as much as they can in order to prepare. Like sprints and races, loans need a lot of determination, careful thinking, planning, and organized coordination.
For starters, FHA loans make things much easier to build home equity a lot earlier on. Because requirements aren’t as strict as the ones traditional loans ask for, more people with modest economic profiles are given the chance to own houses, too, making this the best loan program to jumpstart one’s journey to a home acquisition.
But what exactly is the best FHA loan out there?
The answer is extremely simple in that this should be determined by what you’re looking for, where you’d like to reside, the type of loan arrangement you can afford, and the kind of house you’d like to buy. All these are factors in finding out what the best loan is for you.
To put into context, here are a few FHA loan types:
First on this particular list is the FHA Adjustable Rate Mortgages (ARM). What ARM does is help in securing initial mortgage payments and interest fees are at the smallest possible costs. Known as Section 251, ARM allows home acquisition with interest rates that either go up or down in the process.
To clarify, for a set number of years, a borrower is required to pay for fixed rates. Once the set duration is done, these fees will alter depending on the market’s present interest rates. Logically, your payment will rise should the fees rise and they should become cheaper should the current interest rates go down.
ARM benefits those who dream of home ownership and choose to live in one area for a good number of years but are okay with the idea their house once their fixed-rate duration is done.
Graduate Payment Mortgage is also a good option. GPMs are designed for professionals who currently have modest to low incomes but expect them to grow in the next 10 years if not 5. Also referred to as Section 245, borrowers who are not able to shell out a huge amount of money are still able to buy a home and pay for mortgage rates that eventually increase together with their earning potential.
For those whose dream houses are yet to materialize, a borrower may also opt for FHA’s One-Time Close loan. An OTC fuses the funding needed in lot-purchasing, architectural work, and traditional residential mortgage payments into a singular loan. So if the house you envision of living in has not been built yet, this loan might just be perfect for you. Also known as construction-to-permanent, this loan aids an individual in funding and financing a house from scratch.
Moving forward, there is also a very specific loan for people who wish to purchase damaged homes but find great potential in these houses once renovations are done. Streamline and Standard are both sub-loan types for a 203K. Both types differ in the extent of reconstruction done but are similar in that funding for furniture replacements and renovations can be included in the loan.
Furthermore, those who see themselves reside in a condominium may opt for the FHA Condominium Loan. Known as Section 234(c), the mortgage of this arrangement is insured for up to 30 years. The limit of the loanable amount is determined by the FHA which in turn is determined by the number of units the borrower will want to purchase. The location of the condo also plays an integral factor in establishing the loanable amount. Like a menu from a diner, a borrower will be presented a list of condominiums that are partnered with the FHA.
For more information about other FHA loans and sweet real estate deals, contact the top FHA lender in your area now!