Types of Home Loans

Ready to Buy a home?

What types of home loans could you qualify for?

 Let’s face it, loans are complicated! And thinking about all the different choices can make your head spin. With so many loans out there, I wanted to talk to the experts and explore some of the best options.

Summer Crowe, Loan Originator at Independence Bank, gave me some insight on the different types of home loans out there. 

Summer Crowe Independence Bank Owensboro
Summer Crowe
Loan Originator, Picture Courtesy: Independence Bank

Loans and Programs for First Time Home Buyers

 

If you’re a new home owner, Summer says that there are  a few great options for you. Here are the programs she talked about: 

 

1. FHA Loans- 

First of all, FHA loans allow you to pay less for your down payment on your first house. You can put as little as 3% down. The only downfall is, you will have to pay an extra fee each month. This fee is an insurance policy that helps protect the bank if you can’t pay your monthly mortgage. Luckily, if you have great credit, these monthly fees can be less than $100 a month.

2. Down Payment Assistance-  

Another thing to consider when buying a home is the down payment. As a first time home buyer, it can be very difficult to put 3-10% down on your home because you don’t have equity from another home to give you that head-start. However, there are some programs available that let you borrow up to $6,000 to put towards a down payment. You would pay this off like a second mortgage each month. 

 

3. Adjustable Rate Mortgages-

Another option for first time home buyers is to take out a loan with an adjustable rate mortgage. These loans are a little riskier, but may give you the option of paying a smaller down payment without worrying about the mortgage insurance required for an FHA loan. With an Adjustable Rate Mortgage, you are promised an interest rate for a small amount of time (3-7 years depending on what your bank offers), and then your rates could change after the agreed upon time. This could be risky because your payments could go up if the interest rates are higher than when you started your loan. However, if you plan to move or refinance before the terms are up, you may not have to worry about that. 

“When shopping around, be careful when looking at the teaser rates shown on loan advertisements. Those interest rates are usually the best rates they can give if you have a perfect credit score. No matter which bank you choose, your credit score greatly affects the interest rate they can give you.”

Closing Costs

Don’t forget about closing costs when saving up to buy your home! Not only do you need to provide a down payment, but you also need to pay fees to the bank, title company, and insurance providers to pay for processing your loan. While each bank charges a different amount, you need to make sure you have a few thousand extra dollars for these fees.

Before You Buy Your House:

Need to know more about the home buying process? Contact Jordan Boswell for more information. 

home, couple, mortgage-3370178.jpg
plant, design, home-4243898.jpg

Great Lenders to Contact For More Information

Loans Available At Liberty
TJ Smith Edge Home Finance Owensboro

TJ Smith- Edge Home Finance

Jordan Boswell Owensboro KY Realtor

Contact Jordan Boswell Directly:

The Blake Hayden Group

Compare listings

Compare