The process of purchasing a home is an involved one, and you’re going to have to make a lot of decisions before the fateful day you move into a place all your own. One of the most important decisions you’ll make revolves around the kind of home loan program you decide on.
Finding the best home loan program is often easier said than done, though. With so many loan programs to choose from, finding the best one can feel a little like picking a needle out of a haystack. This is why you’ll want to spend some time getting familiar with the different programs available, so you not only know what to look for but also know how to recognize it when you find it.
Finding a Home Loan Program That Works for You
Here are the types of home loan programs you’ll inevitably come across in your search:
- Fixed-Rate Programs: These are the most popular type of home loan, as they offer a fixed interest rate that won’t change for the number of years established when you’re approved for the loan. And since they come in 30, 15, and a variety of other periods, each buyer can have a program that works for them.
- Adjustable-Rate Programs: With a lower interest rate at the start of the loan, these loan programs can help buyers get a house that may have been beyond their reach otherwise. However, that interest rate will fluctuate during the life of the loan (although there are usually caps set up to prevent it from going up too high or low).
- FHA Loan Programs: This kind of home loan program is often sought after by first-time homebuyers, as FHA backing means “borrowers can qualify for loans with as little as 3.5% down.” It’s important to note, however, these loans do have upfront and ongoing costs built into them via mortgage insurance premiums.
- Veteran’s Administration (VA) Home Loan Program: These programs offer veterans 100% financing, highly competitive interest rates, a lower credit score requirement, and a variety of other potential provisions. There is a funding fee involved, but it’s automatically financed within the mortgage.
- USDA Loan Programs: If you’re looking for a home in a rural area, then this might be the home loan program for you. While these loans do carry an upfront fee, the USDA will provide qualified borrowers with 100% financing.
- Jumbo Home Loan Program: If a mortgage loan is higher than the conforming loan limit for a particular type of home, it is considered a “jumbo mortgage loan" and will require the borrower to meet specific requirements. While unusual, these loan programs can help buyers get their dream house.
Choosing a home loan can feel daunting, but it doesn’t have to be! Instead of digging through all of the different home loan programs available and trying to find the one that best suits your needs, get in touch with one of Poli Mortgage’s seasoned loan officers today! We’ll help answer any questions you have, assess your situation, and then guide you toward the best home loan programs for you.