Your Down Payment
Coming up with the necessary down payment for a home loan can be a big hurdle for many would-be home buyers. Fortunately, there are options available including loans that require no money down. These loans generally carry a higher interest rate, but even so, these loans can be very affordable when you factor in today's overall rates.
Amortization, Income, and Qualifying for a Mortgage
For self-employed buyers and others who have a difficult time documenting income history, this loan may be for you. Programs exist for up to 90% financing. These loans carry a slightly higher interest rate, but generally speaking, the more information you can document, the lower the interest rate. There are certain liquidity requirements typically associated with this type of program.
Fixed-Rate and Variable Rate Mortgages
With a fixed-rate mortgage, the interest rate stays the same for the life of the loan. But with an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.