If your credit history is preventing you from getting a mortgage, then a subprime, also called non-prime, mortgage may be for you. But are they a good idea? How Subprime Mortgages work You take out a subprime mortgage the same way you would take out a conventional mortgage. The biggest difference between the two is the interest rate; because a subprime borrower is at greater risk of...
What Is A Conventional Loan A conventional loan is a mortgage loan that is not insured or backed by the federal government. It is instead backed by private lenders, and any insurance is paid by the borrower. Conventional loans are the most common loan type, much more than government-financed loans. Though conventional loans offer the buyer more flexibility, they carry more risk because they...
What Is an Adjustable Rate Mortgage (ARM) An adjustable rate mortgage is a type of mortgage in which the interest rate on the loan balance changes throughout the life of the loan. The interest rate is usually fixed for a specific amount of time and is periodically reset often yearly. The new interest rate is based on a benchmark called an ARM margin. Understanding Adjustable Rate Mortgages -...
If you’re struggling to save up a down payment for a conventional loan, then an FHA loan may be for you. FHA loans make buying a home easier for first time home buyers and people who have a hard time getting approved for a conventional loan by providing looser guidelines such as Minimized credit qualifications Lower down payment requirements Cheaper closing costs How do FHA Loans...
If you’re a veteran or currently serving in the military you are eligible for a VA loan. A VA loan is backed by the Department of Veterans Affairs and is designed to help veterans, current military members, and military spouses buy a home. They’re pretty easy to qualify for and don’t require a down payment. VA Loans are issued by private lenders but are insured by the government. That means...
A jumbo loan is a type of mortgage that exceeds the conforming loan limits of Fannie Mae and Freddie Mac. Jumbo loans are designed to finance luxury properties and come with special underwriting requirements and tax implications. The value of a jumbo mortgage varies by state – and even county - and is based on the home value in the specific county. If you’re looking to buy a home that costs...
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