Ready to purchase a Lake Mary home? Here’s what you need to know about Florida home loans. Which one is right for you?
Types of Florida Home Loans and Their Differences
Finding the perfect home in Lake Mary is exciting! It represents a new chapter in your life. However, it can be difficult to know what the differences are in Florida home loans and which one is right for you. This is your guide to the most common types of home loans available to home buyers and which type of buyer each works best for.
Fixed-Rate Home Mortgages
Fixed-rate mortgages are typically either in a 30-year term or 15-year term. The 30-year term option is the most popular because it gives home buyers a lower monthly payment. On the other hand, the 15-year term option allows home buyers and investors to pay off the loan faster with a lower interest rate.
Both options have a fixed interest rate that does not change over the course of the term. Since there isn’t a fluctuation in the interest rate, monthly payments are predictable, which is appealing to homeowners.
This type of home loan offers buyers a fixed interest rate for a specific amount of time (e.g. 3 years). After the specified amount of time has passed the rate adjusts every so often (e.g. annually). This option is ideal for those who know they will be able to pay the loan off within the initial fixed-interest rate period or for those who are willing to take a gamble that interest rates will remain low.
The attraction to an adjustable-rate mortgage (ARM) is that the initial rate tends to be lower than most other types of loans. Beware that if you do not have the loan paid off within the fixed-rate period, your payments could inflate significantly.
FHA mortgage is backed by the government and insured by the Federal Housing Administration. This is a good option for those who may not have the cash on hand for a large down payment. Often times, buyers can put down as little as 3.5 percent and can qualify with much lower credit scores than other home loans require.
This type of home loan is for buyers who are looking to purchase in more rural areas. USDA mortgages are backed by the U.S. Department of Agriculture. Typically, a very low or zero down payment is required when going this route. In order to be eligible, homebuyers can only buy properties up to a certain value and must have limited financial resources that prevent them from being able to secure most other types of loans.
VA Home Mortgage
VA mortgages are only open to military service members or veterans. They are backed by the Department of Veterans Affairs. Those who qualify must pay the VA funding fee but can take advantage of a zero-down payment, low-interest rate, and no mortgage insurance.
Partner with Lake Mary’s Real Estate Expert!
Find the right home is only half of the equation. It is just as important to find the right home loan to fit your needs. With more than 30 years of experience in the real estate industry, the Gitta Sells team will help you with the home buying process from start to finish. Contact Lake Mary’s most reputable realtor today at email@example.com or 407-330-2181.