Mortgage Loans

If you are under financial crisis and the problems become deep when you have already borrowed the loan and now you are unable to apply for the loans. To face that type of problems you can mortgage your property and you can avail the amount enough to fulfill your financial problems as well as repay the loan amount. Mortgage Loans are found in two types. Long term mortgage loans and short term mortgage loans. The advantage of long term mortgage loans is that you can also choose for fixed rates and save considerably on the interests. Interest rates for Mortgage loans can be significantly lower if your credit score is high. Interestingly, people with high credit scores are also offered mortgage loans with no down payment. There are a large number of mortgage loans available hence getting an affordable and easy mortgage loan should not be a problem. Even if you have a bad credit history, you should shop around a bit and surely will come across a suitable mortgage loan. Mortgage loans are funds that are advanced from a lender to a borrower upon the latter’s application for a loan. The loans are secured by real property. A mortgage is the document that serves as proof of the property being pledged as security. In the mortgage loan agreement, the person who pledges the property and secures the loan is termed the borrower. The institution or the individual that issues the loan is called the lender. The pledged property can be seized in the event of the borrower defaulting on payment of the monthly mortgage payments. The process of mortgage loans works by the borrower receiving the loan first and then making periodic payments, usually monthly, over the term of the loan. Once all the installments have been paid, the title to the property passes to the borrower. Repayment process of the mortgage loans is for the long term. You can repay the mortgage loans with in 25 years. Rate of interest depends on the amount of the loan and the security that you have to place against the cash. You can solve all the financial problems easily with the help of the mortgage loans.

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help choosing a good mortgage loan?

my fiance and i have excellent credit and we are buying a brand new home but i want to make sure we get a good loan. what’s the best type of loan for someone who doesn’t want to put anything down and only pay minimal costs at closing? is it an 80/20 loan, an FHA loan, or just 103% financing? i have tried browsing the net for an answer but couldn’t really find one that struck me as the best without a doubt. again we both have near perfect credit and should have no problem getting any loan.

Answer
The best loan for you is up to you. Meet with a qualified, experienced mortgage banker or broker and ask all of those questions. Researching it on the internet will only give you basics. There are many loan products to choose from and since you are the one to be making the payments, you need to be the one making the decision.

They all have their purpose and what might be good for one is not for another. FHA is a great program, they require a downpayment of 2.25% but you can have the seller fund that with a CHAPA Gift and the seller can pay the closing costs. However, there is up front mortgage insurance and monthly mortgage insurance and the monthly never goes away.

Conventional loans can go to 100% but they have mortgage insurance (PMI). You can eventually have a new appraisal completed to have the PMI removed but usually only after 12-24 months of on time payments.

Combo loans are good for some (80/20) but make sure your blended rate is at least as good as avoiding PMI because that is their main purpose. However, if you get a HELOC (home equity line of credit) for your second you might like that because as you pay it down, you can use it again if you like.

I am not a fan too much of 103% financing but that is also an option to consider. You can also ask the seller to pay your closing costs and raise the price to do this so in essence you are doing the same thing.

By the way, ARM (adjustable rate mortgage) products are also a good choice for some if the spread on the rate creates a savings monthly and you think you will only be in that mortgage for the fixed period of the ARM (say 5 yrs). If this is your first home, it is likely in 5 years you will sell and move up. I personally am a big fan of the ARM, over time that actually can out perform a fixed rate when rates are running a little bit higher as they are right now.