Your mortgage is always specific to your lifestyle and situation when you are looking for a home to buy. There are numerous factors to consider when you are trying to determine which is the best home loan option for you. One buyer might be comfortable with a 20% down payment, a different might need to have down payment assistance. Another factor that will play a role in the kind of home loan you select is how long you are planning to live in your house. Below we will provide a brief overview of some of the options. However, the best thing to do to receive a full breakdown is to contact one of our loan officers.
A fixed-rate mortgage is one of the loan options for you to consider. The interest rate stays the same on a fixed-rate mortgage for the whole life of the loan. It provides a predictable monthly payment amount for a 10-30 year term. This kind of loan is suited the best for buyers who are intending to stay for a long time in their homes. The major advantages of fixed-rate mortgages are:
– Monthly payment stability
– Interest rate security
An adjustable-rate mortgage (ARM) is another option that you can consider. The interest rate on an ARM mortgage is adjusted periodically which is based on an index. The ARM mortgage is a great option for homebuyers who plan to move to a different home within a couple of years. Depending on the kind of ARM loan, the monthly payment and interest rate will vary with each adjustment period. What the adjustment period refers to is the time period between each interest rate, so 5/1 means the first reset of the rate occurs after five years and then continues to reset every year for the entire life of the loan. The major advantages of an adjustable-rate mortgage include:
– Lower monthly payments for the initial term
– Low initial interest rate
Buyers who need some help with their upfront fees have the option of Down Payment Assistance (DPA) Loans. State-specific programs are offered by State Housing Finance Agencies to residents who need assistance with buying a house. The problems can be either in the form of a grant or loan and help with down payments, closing costs, and student debt relief. The major advantages of DPA loans include the following:
– State-specific programs to help most buyers
– A lower amount of upfront money required
If you are planning to get a home loan in Los Angeles, we at Mortgage Help Los Angeles offer various home loans to meet your needs. Although reading about various types of loans is a good start, in order to know precisely which home loan option is the best for you, it is a good idea to speak with a mortgage professional. Contact us today so we can thoroughly go over your goals and situation to come up with a custom plan.
