Michigan Va Loan

Posted on December 12, 2011 by Admin
Michigan Va Loan

Michigan Va Loan

Choosing the right type of home to purchase is a task in and of itself. With so many types of mortgage loan programs available, this makes the task that much more difficult. Before making a decision, it is important to know the types of loans that are available as well as the benefits and risks of each. In addition to knowing the categories, take the time to research and review with a financial advisor.

Popular Mortgage Loans

The most popular types of mortgage loan programs include fixed-rate mortgages, Federal Housing Administration (FHA) loans, Veteran Affairs (VA) loans and interest only mortgage loans. Fixed-rate mortgage types are those that are amortized and give you the option of 15, 20, 30, 40 or 50-year mortgages at a fixed rate. FHA loans are ideal for first-time home buyers since FICO scores are not relevant and the down payment requirements are minimal; these types of loans are backed by the government through mortgage insurance. VA loans are available to veterans and, in some cases, the spouses of veterans who have passed; this government loan does not require a down payment. Interest-only mortgage are not really interest-only, these loans include the option of making an interest-only payment.

Hybrid Mortgage Loans

There are also hybrid mortgage loans which include option ARM mortgage loans, adjustable-rate mortgage loans, piggyback/combo mortgage loans and mortgage buydowns. Option ARM mortgages are based on an adjustable rate; these complicated mortgage loans may end in negative amortization. Adjustable-rate mortgages come in a variety of options where the interest rate fluctuates on a monthly, annually or semi-annually basis; it can also remain fixed for a certain period of time. Piggyback/combo mortgage loans consist of two loans, a combination fixed-rate and adjustable-rate mortgages or two of each. Mortgage buydowns are when you, as the borrower, pay fees to lower the interest rate initially.