So, you have discovered that dream home you’ve always wanted, now it’s time to find which of the mortgage loan programs is best for you? There really is no easy way or answer to this question; home loan programs need to be researched and studied in order to find which one is the best for your situation. This process relies on your individual household preferences and your financial situation and circumstances.

Some of the key factors to think about when selecting from the various mortgage programs. What is your current and existing financial situation, do you expect this to change and when? How comfortable are you with a variable home loan mortgage payment? A fixed rate purchase loan can save you thousands in interest over the duration of the loan and even help with knowing exactly what your monthly mortgage payment and rates will be for the entire term. An adjustable and or variable rate home loan will usually start out with a lower monthly payments and in many cases fluctuate upward as interest rates change.

Once you have actually decided on fixed or variable and chosen which type of loan is best for you, now you must research and try to pick which of the most popular home mortgage loan programs will actually serve you best.

Traditional and or conventional home loans are in some cases protected by federal government sponsored lending institutions. These are often referred to as federal government sponsored entities (GSE’s). They can be used and utilized to acquire or to refinance single family or four-plex type homes with a first or a second home loan. If you require a jumbo loan based on the upward pricing trend of the national average of brand-new homes, there may be limitations and requirement that change each and every year. If you were to choose the jumbo loan type of house loan program, you would need to check what the current year’s limits are for a precise amount you are looking to borrow.

FHA loans are programs that help with the low end of earners so that more households may become home owners. By insuring the home loan from the start, they help to motivate lenders to make home loans available to families that may not meet the typical credit guidelines. The FHA loan also enforces limitations on the fees from the home loan provider such as the loan origination charges and fees which cannot be more than 1% of the amount of the home loan.

VA loans are another loan type of program which is offered to military veterans who served on active duty and were discharged under conditions other than dishonorable. For example; World War II (September 16, 1940 to July 25, 1947), Korean War (June 27, 1950 to January 31, 1955), and Vietnam War (August 5, 1964 to May 7, 1975) veterans should have at least 90 days service. Veterans with services that go throughout peacetime duration and active duty military personnel must have had more than 180 days active service in order to qualify.
The greatest benefit of the VA loan is that no down payment is required. There is also no mortgage insurance coverage payments needed, and closing costs to the purchaser are also limited. You can work out interest rates with the home loan provider and you then have an option of payment plans with terms that are up to 30 year long.

The last loan program we will mention is called a subprime loan. This is a purchase loan for people with bad credit who would not receive a conventional loan or a VA loan or FHA loan. These loans typically will require much higher deposits and have higher interest rates. This is to mediate for the much higher risk of defaults to the mortgage loan provider. These loans are usually much shorter terms, such as two to four years and are a very good way to improve your credit score, history and even circumstances, you can then refinance with much more favorable rates and terms.