Financing home mortgage helps you finance or refinance the home of your dreams. Home Mortgage financing helps to make your buying house or renovating old house experience a hassle free one. There are many considerations when you purchase or refinance your home. The current property value, immediate home equity in the form of a down payment, or home equity gained from years of ownership, current credit standing, mortgage rates, and the cost associated with purchase or refinancing. As you have a greater variety of mortgage loan rates and terms to choose from, the first step in fulfilling your dream is building your knowledge. As a prospective homeowner, you have a wide range of home mortgage financing options to choose from:-
- Government loans backed by federal or state agencies. The most common types are the Federal Housing Authority (FHA) and Veterans Administration (VA) loans. These programs typically allow lower down payments and have more liberal qualifying guidelines.
- Conventional loans. Conventional loans are designed for both first-time and move-up homebuyers and make up the bulk of mortgage loans sold.
- Jumbo loans. A jumbo mortgage is finance or refinance loan that exceeds $359,650 for a single-family home. It is also called a non-conforming loan because it does not conform to the loan limits set by Fannie Mae (The Federal National Mortgage Association) or Freddie Mac (The Federal Home Loan Mortgage Corp).
- Alternative financing. These home mortgage financing are designed for borrowers with less than perfect credit histories, excessive debt, or previous bankruptcy, foreclosure or tax delinquency.
- Self-employed financing. These home mortgage financing offer flexible financing guidelines that better meet the needs of borrowers with hard to document income, such as those who are self-employed or work in a commission-based position.
A "point" is equal to 1% of the amount of your loan, and the more points you are able (or wish) to pay, the more you can lower your rate. In addition, points may be tax-deductible. Whether or not you pay points often depends on how long you intend to stay in the home.
- If you're planning to sell in a few years, it may make sense to forego paying points and get a higher interest rate.
- However, if you plan on staying in your home for a long time, for example more than five years, then it might make sense to pay the points to get a lower interest rate.
- If rates are low and you want to protect yourself against financial market fluctuations, consider "locking-in" your pricing.
- If rates are dropping and you're willing to take the risk that rates will raise before you close, you might consider "floating" instead.