Find the ideal loan

When it comes to buying a home, most people know what they prefer: a bungalow or condo, a lively neighborhood or a quiet street.

Mortgages also come in many styles, and knowing which type you should choose is a bit trickier than, say, knowing that you prefer hardwood floors to wall-to-wall carpeting.
First things first: to choose the best loan that suits you, you need to be clear about exactly what your situation is. Will you stay in this house for years? decades? Is your financial situation stable? Are you worried about variations in loan rates? Complete the checklist on page 9 and read the “Before Choosing a Lender” section on page 29 of this guide.

The next step: Have a good understanding of the different types of loans available. There are so many options, and so much variety can sometimes be confusing.

Mortgages are at a fixed or variable rate, you choose the one that is best for you

Let's start with the most common type of mortgage, that workhorse of home loans: the
fixed rate mortgage.

Fixed Rate Mortgage: Allows you to lock in an interest rate for 15 or 30 years. (It can also be 20 years). This means that the monthly payment will remain the same throughout the life of the loan. (That said, property taxes and insurance premiums are likely to change over time.)

An adjustable rate mortgage (or ARM mortgage):

• Offers a lower interest rate than a fixed-rate mortgage for an initial term, say five or seven years, but the rate can fluctuate after that period ends, depending on changes in interest rate conditions . And that can make it difficult to control your budget.
• Has a cap or ceiling that restricts how far the rate can go.

Conventional or government loan? In your life is the answer

Depending on the fixed or variable rate mortgage you can obtain, there will be other categories that apply, which fall into two large groups: conventional loans and government loans. Conventional loan:
• Offers some of the most competitive interest rates, which means you'll likely pay less interest over the life of the loan.
• Can generally be obtained faster than a government loan because there is less paperwork.

Who can order them? Generally, you need at least a credit score of 620 or higher and a
5% down payment to qualify for a conventional loan.

Government Loans:

• These are loans provided by agencies such as: Federal Housing Administration (FHA), US Department of Veterans Affairs (VA), and US Department of Agriculture (USDA) Rural Development.
• They are intended to stimulate the housing market and allow people who cannot qualify for conventional loans to become homeowners.

Who can ask for it? It depends on the type of government loan you are evaluating.

Estee Soto

Estee Soto is a real estate agent with eXp Realty, a certified mentor and eXp Latino ambassador, and the CEO and founder of TagCrush LLC, an all-in-one digital marketing platform for real estate agents. She leads the TAGHOMES team, specializing in luxury properties, new developments, and international buyers across Florida.

More information about Estee Soto HERE