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Beginner’s Loan Calculator Guide: How To Choose The Right Mortgage Purchasing your dream home is an exciting time for individuals and couples. However, it can be very stressful and bring many challenges, especially when it comes to financing a home. There are so many components to review and understand when determining the right home loan to meet your unique needs. Some of the points you will need to assess include; how much can you afford for a home, how to use a loan calculator, do you need to increase your credit scores, how much do you need to have in savings, and more. Today, we will focus on mortgages. The following information gives a high-end overview of the different selections of mortgage choices available and provides examples of the type of buyer each option would benefit.10 Loan Calculator Mortgage Options To Evaluate Conforming Loans Most home buyers today choose conventional loans for their mortgage needs. They are flexible with terrific rates and have many down payment options. They offer better terms than non-conforming loans due to the lower risk for lenders. Most conventional loans are known as “conforming loans” since they meet Fannie Mae and Freddie Mac standards which provides backing for conforming loans. Some of the terms conventional financing provide according to HYPERLINK "; Mortgage Reports include; a down payment as low as 3% for certain loans and at least 5% for most, no upfront or monthly mortgage insurance with a down payment of 20% or more, they are available for the home you’ll live in, a second home, or investment property. Also, fixed and adjustable rates are available with many loan calculator lengths typically between 10 and 30 years, unlike FHA, you can cancel your mortgage insurance with 20% home equity.Requirements include; standard loan calculator limits in 2019 up to $484,350 for a single-family in most markets and up to $726,525 in high-cost areas, a credit score of 620 or higher for fixed-rate mortgages and 640 or higher for adjustable-rate mortgages, up to 50% debt-to-income ratio in certain situations and up to 36% debt-to-income ratio as the standard.Conventional financing is the default loan or popular loan choice for most average home buyers.Don’t Have Time To Read The Full Article, HYPERLINK "; Start Here to Contact A Home Loan Consultant Now. Non-conforming LoansA non-conforming loan, otherwise known as “Jumbo Loans” falls outside the Fannie Mae and Freddie Mac standards. According to HYPERLINK "; USNews, Jumbo loans usually have lower loan calculator debt-to-income limits, however, they have higher credit scores and down payment requirements.Other non-conforming loans are available if your credit score or financial circumstance does not meet the standard requirements. Non-conforming loans are good for individuals who are self-employed where your income is not fixed or a challenge to document. Also, this type of loan should be considered if you want to live in a lower or higher cost of living area that is below or above the conforming standard loan limits. It’s not uncommon to see Jumbo loans in the million range for higher loan calculator limits. Fixed-Rate LoansThe principal and interest rate on these loans won’t change for the life of the loan since the interest is fixed. Unlike an adjustable-rate loan, the interest starts high. The advantage is that the payment won’t change and your rate will always stay the same.This loan is great for individuals who don’t like the uncertainty of fluctuations in their loan rates and want to lock in a good guarantee interest at the time of purchase. Also, if you plan to live in the home for a long time, this type of loan can be considered. Adjustable-Rate LoansThis type of loan starts with a lower fixed interest for a certain number of years, usually 3 or 5, however, it can stay fixed for up to 10 years. After the initial period, the interest rate will adjust up or down based on the market rate.Some adjustable-rate loans come with a maximum increase or decrease interest rate limit for the life of the loan calculator. You can save thousands of dollars during the first few years of interest with this type of financing compared to a fixed-rate loan. Also, it gives you time to sell the home or refinance before the rate adjusts.Individuals or couples who don’t plan on staying in the home long would benefit from this type of loan. Also, if you are confident that you will be able to refinance or sell before the rate adjusts higher, this loan would be advantageous. Last, this loan makes good sense if you think the interest rates will go down in the future.Don’t Have Time To Read The Full Article,Start Here to Contact A Home Loan Consultant Now. Government Insured LoansThese loans are backed by government agencies and offer specific advantages on eligibility, features, and requirements to certain home buyers that most loans don’t offer. The following are loans that are government insured;FHA LoansBacked by the Federal Housing Administration, these loans offer lower loan calculator credit score requirements below conforming financing. With a credit score of 580 or above, you could get a loan with only a 3.5% down payment. With a $10,000 down loan calculator payment, you could obtain financing with a 500 credit score. You would be required to pay for upfront mortgage insurance costs that are ongoing and may be difficult to remove later, unlike conventional loans.If your credit score is low and you can’t meet the requirements of a conforming loan, this would be a good choice to consider.VA LoansVA loans are backed by the US Department of Veterans Affairs and offer favorable terms to certain military service members and spouses. They don’t have credit score standards, down payment requirements, or mortgage insurance. However, there is a loan calculator upfront funding fee.If you are a military service member or spouse, this would be a good funding option to contemplate.USDA LoansThis loan is also known as Rural Development Loans or Single-Family Housing Guarantee Programs. Backed by the US Department of Agriculture, these loans are offered to individuals who plan to purchase a home in eligible rural areas with low to moderate-income. You could qualify for this type of loan calculator financing with a 580 or lower credit score and there are no down payment requirements. However, there is an ongoing upfront guarantee fee and an annual fee.This is a great loan to examine if you plan to purchase in an eligible rural area and meet income requirements.There are many state home loan programs as well. Remember to check your state for any additional financing options. Interest-Only LoansInterest-only payments are made on this type of loan for a set period of time between 3 through 10 years. You can make a large balloon payment, refinance or make principal and interest payments after the initial period ends for the life of the loan.This loan calculator option makes sense if you are on a budget, only plan on being in the home for a short period of time, or are confident that you can make the large balloon or higher payment after the initial period. Piggyback LoansThis type of loan allows you to avoid private mortgage insurance on conventional financing without putting down 20% as shown in HYPERLINK "; USNews. As an example, you would put down a loan calculator payment of 10% of the home’s value, take out a home equity loan or line of credit for another 10%, and finance the remainder with a mortgage.Because you have two separate loans, it may be challenging to keep up with future payments, especially if the second loan has a loan calculator variable rate that increases over time.Individuals or couples can entertain this loan if private mortgage insurance is more than what you would pay on the second loan and refinancing is not on your to-do list in the near future.SummaryAs you can see, there are many types of loan options to consider when purchasing a home. Many factors are involved when determining what would be the right loan calculator choice based on your particular circumstance. Estimating things like, how long you’ll stay in the home, if you’ll have enough money to make higher payments for adjustable or fixed-rate loans, if you meet credit score or down payment requirements and other conditions will help make this decision easier. In addition, seek the help of a good home loan professional who can ask the right questions and customize a loan package that will meet your needs.Did you find this valuable information helpful? Remember to share it with others.Are you considering a new home purchase, remodeling, or looking to cash out on your home’s equity and need help? We are a highly rated mortgage lender who customize loan packages for over 1 million satisfied buyers and we can do the same for you. Leave your home financing stress with a company who been in business for over 30 years by contacting us today. * Photo Credits;<a href="https:/free-photos-vectors/business">Business photo created by freepik - </a><a href=" photo created by freepik - HYPERLINK "; </a><a href="https:/free-photos-vectors/business">Business photo created by freepik - </a> ................
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