Mortgage Information

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Evaluating The Type of Mortgage That’s Right For You

There are several types of mortgages available in the lending industry. You will need an honest agent who can match you up with what you really need.  The complete information will be explained by your brokers. However, you need to familiarize yourself with these mortgages so that you have a background on the coverage of what you apply for.  Here are a few details about the mortgage types that you can avail:

Federal Housing Authority:

-          The Federal Housing Authority or the FHA is an insurance system that is offered by the government. It aims to assist the low-income Americans, single mothers and first time homeowners to obtain a home.

-          Anyone can apply for an FHA mortgage. Even individuals who do not have a FICO score or a good credit standing can apply for it. When circumstances change and your financial state becomes unstable, the FHA can be modified to lower the fee.

-          With the help of an FHA, you can avail of a home even with a limited budget. This is better than saving enough money to afford other mortgage loans. Remember that the market value and interests of insurances change from time to time. This may lead you to inadequate funds because the value of the property already changed when you are ready to get it.

Veterans Assistance Loans:

-          The Veterans Assistance Loan or the VA loan is a long-term financing programming of the US government. This aims to assist any army veteran in purchasing a home.

-          The VA loan can also be used by the spouses of the veterans when they die. This is allowed as long as their spouses do not remarry. The VA loan is not applicable to any army who was dishonourably discharged from service.

-          The Department of Veterans Affairs serves as your guarantor for this kind of loan. It requires no down payment, which is favourable for anyone who wants to own a home.

Reverse Mortgage

-          If you are at least 62 years old, you may want to avail a reverse mortgage. Instead of owing from your lender, you can use your equity to receive money from them. Under the reverse mortgage, you do not need to pay any amount to the lender. However, when you pass away, your home will be sold and the profit goes to your lender.

-          Reverse mortgages are expensive. You also need to pay your property taxes and a maintaining insurance for it. That is why you need to conduct a critical study before getting into this kind of loan.

Piggy Back Loans

-          The piggy back loan is two loans that cost less than one. It uses one mortgage from two or more lenders. It requires less than 20% of the usual down payment. Therefore the risk of this loan is spread among the brokers making it easier to approve your application.

-          However, the sum of the interest of all the lenders may cost higher than the monthly interest to be paid to one mortgage broker in the long run.

The author helps South African citizens to get Nedbank home loans approved. To read more visit the author’s site at securebonds.co.za

 

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