What Financing Options Are There Available and What is the Best Option For Me?

Whether you’re a First Time Home Buyer, An Experienced Home Buyer or an Investor financing can be a scary and intimidating topic. There are many financing options available including Home Buyer Assistant Programs that can be used towards a Down Payment and/or Closing Costs. For Texas residents, Texas is 1 of 7 states that has additional benefits for Veterans. My responsibility as a Real Estate Consultant is to identify and provide information and details on the financing options that are available in order to help you make the decision the is right for you and your family.

Things to consider when determining which mortgage is best for you:

Will you be living in the property – Owner Occupied or will this be an investment property?
If you will be occupying the property, how long do you anticipate living there?
Are you a Veteran?
Are you a First Time Home Buyer?
What areas are you considering living?
What are current interest rates and How have them been trending?
Do you have funds for a down payment and closing costs or will you need assistance?
How much do you have for a down payment?
Are you depending on funds from the sale of your house to be used towards your payment?
Are you age 62 or older?
Are you getting a considerable increase in salary/compensation within a short timeframe?

Private mortgage insurance (PMI) – Usually required for loans that have a down payment less than 20 percent of the sales price. It is added to the monthly mortgage payment and it protects the Lender against a loss if a borrower defaults on the loan.

4 ways to cancel PMI

Refinancing your home
Updated appraisal – Showing in have reached at least 20% equity
Pay down your mortgage faster to reach at least 20% equity
Wait for scheduled cancellation – Once your loan is scheduled to reach 78 percent of the original value of the home, or when you’ve reached the halfway mark in your payment plan, by law, the lender is required to automatically cancel PMI monthly payments. Some lenders may do this at 80 percent, but ultimately it’s the lender’s choice.

Fixed Rate Loans- The Principle and Interest (P and I) monthly payment amounts stay the same for the duration of the loan. 15, 20, or 30 years repayment terms are most common.

Adjustable Rate Loans (Variable Rate Loans) – usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates rise, generally so do your loan payments; and when interest rates fall, your monthly payments may be lowered.

Interest Only Loans – A loan where the borrower pays only the interest, not the principle amount) for some or all of the term, with the principal balance unchanged during the interest-only period.

Interest Only Loans: Pros and Cons