What Are the Home Loans Available to You?

FHA loan paperwork with pen, glasses and moneyAre you looking to buy a house? If that’s the case, you’re likely to be shopping for a good value loan as well. Nowadays, there is no one-size-fits-all mortgage; people are looking for rates that suit their budget, their needs and how long they plan to stay in a particular place.

An expert on home loans in Utah cites the following types you can consider.

Fixed-Rate Loans

This is a common loan that most home-buyers get; this is a type that provides a single interest rate for the loan’s entirety, which is usually 15 years or three decades. This is the home loan homeowners who want to plant roots and who do not have plans to leave their current location anytime soon. This is a stable type wherein you pay a certain amount for a certain number of years until its end. The highs and lows of interest rates over time won’t lead to changes of the loan. If you plan to move within a few years, this may not be the ideal option for you.

Adjustable-Rate Loan

The interest rates for this type of loan are usually lower than their fixed-rate counterpart up to a given period. However, once that time-frame lapses (usually 5 to 10 years), the payments and interest will adjust to correspond with current changes in the market. In such cases, if the interest increases, your monthly dues will also rise, if the rate falls, you’ll payments decrease as well.

FHA Loan

Most loans require you to pay at least 20% of the price of the house; however, a Federal Housing Administration loan will only ask for around 3.5%. This is an ideal option for prospective buyers who don’t have many savings to pay for a down payment. There are limits to the loan, and it usually follows a fixed interest rate that spans 15 or 30 years. Buyers must pay for a mortgage insurance over the loan’s life or upfront.

These are just three of the home loans available to you; before you choose one, consider your current savings and income outlook to determine which one is ideal for your situation.

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