Before you consider applying for any of the government-sponsored mortgages, such as an FHA loan, you need to learn about the details of the program. FHA loans are the most popular home loans that are insured by the federal government. If borrowers are not eligible for conventional mortgages, they can apply for an FHA, USDA or any other flexible loan programs. In order to qualify for these loan programs, borrowers need to meet some important criteria. Although this criterion may be somewhat strict, the conditions are much more lenient as compared to traditional loans.
Fixed or Adjustable Rate Mortgage - Which One to Choose
Considering the frequent changes in home loan interest rates, industry experts suggest that you lock-in your interest rate as soon as you find that your monthly payments are affordable. Hence, you may want to consider a fixed rate option in such a scenario. If you don’t lock in your rate, you may have to consider taking a loan with an adjustable interest rate.
Let’s take a look at the benefits of taking out a fixed rate mortgage:
Now, let us consider situations in which taking an adjustable rate mortgage (ARM) could be a better option:
Some adjustable rate mortgage plans allow borrowers to start with a low initial monthly payment. However, the rates are adjusted every year. The low rate in an ARM remains fixed for an introductory period of time. This period can last from 3-10 years. Due to the uncertainty of an adjustable rate mortgage, fixed interest rate home loans are considered more popular among home buyers. However, before making your decision, you should consult a loan officer from a reputable mortgage company for more details.
Darrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others