Loans for Houses
Posted on 16. Aug, 2010 by admin in Home Loans
One of the topics given a lot of attention lately is mortgages, and the fallout from the financial crisis. Many home-worthy people are shying away from taking on a mortgage out of fear of the economy, and the economy is in a stand-still when it comes to home loans.
However, this fear is often unfounded. The current market is unique, in the fact that there are a substantial number of houses on the market, most of which are aggressively priced, and very few buyers. This equation may prove to be challenging for those looking to sell their homes, but it may very well equal a golden opportunity for those looking to purchase a new home.
Many lenders are putting the brakes on those individuals with less-than-stellar credit, and are reigning in those who want to purchase homes out of their means. However, for home buyers like you who have paid their dues, saved for a healthy down payment and have a pristine credit report, now may be the time to dive into home ownership.
With interest rates near historic lows and plenty of anxious home sellers on the market, finding a home and being approved for a mortgage may be in your immediate future.
First Home Buyers
First-time home buyers should look to: first, save for a substantial down payment; and second, become pre-qualified for a home loan.
The key to taking on a home loan if you are a first-time home buyer is to make sure your credit is clear, that you have been employed in the same line for work for at least a year, and that you have saved at least 20 percent down for your new home.
Fixed Interest Loans
Fixed interest loans are ideal for most home buyers, as they offer fixed interest rates – and fixed payments- over the life of the loan. Loans with fixed interest rates can be anywhere from 5 to 30 years, and they typically offer competitive interest rates.
Variable Interest Loans
Variable interest loans feature variable interest rates which are determined by a fixed index and change, according to the loan contract, at prefixed points throughout the life of the loan.
Loans with variable interest rates are ideal for homeowners looking for an initial, low payment, as many variable interest loans offer very low interest rates for the first few years of the loan. It is important, however, to be aware of the rate changes and how they will affect your monthly mortgage payment and your budget.