Last Updated on May 18th, 2022. Original: August 20th, 2015
Obtaining the right loan for your purchase is typically the single most crucial factor in the decision making process and in the successful completion of the transaction.
Whether you are ready to buy your first home, your next home, a vacation home or perhaps an investment property, your choice of financing this property will affect all other aspects of your financial plan.
A+ Home Loans makes your buying experience easy and straightforward. We offer a wide variety of loan programs so that you have the advantage of the most competitive rates on whichever program best fits your situation. We will help you to evaluate each of the options that are available to you so that you can make a fully informed decision. You want to be confident that you have made the right choice for yourself before and after your purchase. Learn more about What to Expect.
We’ll stand apart from other mortgage companies because our expertise, experience and commitment to customer service results in a smooth approval and loan process for you. We’re here to help you explore your options, decide what is most cost effective and to answer your questions.
There are a large variety of loan types. The key is to find out which one “fits” you and your goals best. Our loan professionals are here to assist you in figuring out which program best fits your individual situation.
Your down payment requirement is most affected by whether your purchase will be owner or non-owner occupied.
If you are buying your primary residence, it is still possible to purchase a home for a low or no down payment. We can help you determine based on variety of criteria which program will require the least amount down, if this is your main priority.
For first-time homebuyers, there may be specialized programs that can reduce or eliminate your cash requirements, depending on where or what you are purchasing and the details of your particular situation.
In contrast, for someone looking to purchase an investment property, a greater down payment is currently required, typically a minimum of 20-25% down.
Fixed Rate loans provide protection against rising interest rates because the note rate remains unchanged for the total term of the loan. This is an excellent option for someone who intends to keep the property for many years.
Adjustable Rate loans generally offer initial rates that are lower than the fixed rate home loans available in the market at the same time. Since there are many variations of ARMs, it is a flexible, often attractive loan for homeowners who are planning to keep the property for a short term. However, since there are ARMs with initial rates that can stay fixed from 1 to 10 years, this can also be a good, lower interest option for those who are not sure how long they intend to keep the property. Once the initial rate converts to an adjustable rate, the extent of risk or benefit depends on the other terms of the note, such as the margin, index and rate cap . Since there are many possible ARM configurations, you should consult a loan professional to look at the impact of the details of each available program as it pertains to your situation.
Fully Amortized loans have equal periodic payments that result in an outstanding balance of zero at maturity. Each loan payment is part interest and part principal. Loans can be fully amortized at many various length terms, typically 10, 15, 20 and 30 years.
Interest only loans can be structured in many different ways. They can be interest only for a set number of years and then have a balloon payment where you have to pay off the note, or they can convert to an amortized loan after an initial interest-only period. This does provide a temporary reduction in payments, which can be an attractive solution for borrower’s who are not concerned with short-term equity buildup from loan amortization or for those who know that they will be in a better position to pay a higher loan amount at the end of the interest only period. Some people may simply use the interest only payment if they have an unexpected cash flow change. Otherwise they make additional principal payments beyond the interest only required payment amount.