THE MORTGAGE OPTIONS YOU HAVE TO BUY THAT Raleigh DREAM HOME
Janice Fowler and the entire Perennial Mortgage Group of Raleigh team know that every homebuyer is different. As such, there’s no one-size-fits-all mortgage loan that can fit all needs, budgets and homebuying preferences. To ensure we’re able to meet the wide and varying needs of our Raleigh clients, we’re proud to offer an equally far-ranging array of mortgage loan options to choose from.
See below to learn about the types of mortgage loans you can use for your Raleigh home purchase.
FHA loans, which are backed by the Federal Housing Administration, are ideal for low- and middle-income earning homebuyers. They have less stringent credit requirements and allow for higher debt-to-income ratios than other mortgage types. These also require just a 3.5 percent down payment if your credit score is above 580.
FHA LOAN ADVANTAGES
- Less stringent credit and income requirements
- High debt-to-income ratios allowed
- Low interest rates
- Minimal down payments (as low as 3.5 percent)
Offered through the U.S Department of Veterans Affairs, VA mortgage loans are reserved only for military members, veterans and the immediate family members of these men and women. They don’t require a down payment, and they enforce caps on closing costs, both of which can lower the up-front costs of buying a home. VA loans also do not require buyers pay for private mortgage insurance.
VA LOAN ADVANTAGES
- No down payment required
- Low interest rates
- Capped closing costs
- No PMI required
- Some up-front fees can be rolled into the loan balance
Jumbo mortgage loans help you purchase higher-cost properties. They’re for use on homes the exceed the conforming loan limit ($726,200 nationally, though it might be higher in more expensive housing markets). Jumbo loans typically have stricter credit, cash reserve and debt-to-income requirements than other mortgage loan options.
JUMBO LOAN ADVANTAGES
- Allow for higher loan balances
- Offer fixed or adjustable interest rates
USDA mortgage loans, also referred to a “rural” loans, help buyers purchase homes in eligible rural parts of the U.S. Backed by the U.S. Department of Agriculture, they offer low interest rates, low PMI premiums and require no down payment whatsoever. They have flexible credit and income requirements, making them ideal for low-earning households.
USDA LOAN ADVANTAGES
- No down payment
- Competitive interest rates
- Low PMI costs
- Some up-front costs may be rolled into the loan balance
- Low credit and income requirements
A fixed-rate loan offers a set, unchanging interest rate for the entire length of the mortgage. This means buyers can enjoy a consistent payment and more easily budget for their housing costs. Fixed-rate loan terms are set in stone and unalterable except through a refinance.
FIXED-RATE LOAN ADVANTAGES
- Consistent interest rates
- Consistent monthly payments
- Ideal for budgeting purposes
- Good for longer-term homeowners
An adjustable-rate mortgage loan is the opposite of a fixed-rate loan. On adjustable loans (also called ARMs), the interest rate fluctuates over time. The loan has a small, short period in which the interest is fixed (3 to 7 years in most cases), but after that point, the rate can rise depending on market factors. This means the monthly payment would also rise in step. Though these loans do present a risk, they also offer very low up-front interest rates, lowering the barrier to homeownership significantly.
ADJUSTABLE-RATE LOAN ADVANTAGES
- Low initial rates and payments
- Good for shorter-term homeowners
- Can lower the up-front costs of buying a home
WHAT TYPE OF MORTGAGE LOAN SHOULD YOU USE?
There are many types of mortgage loans out there, and not all of them is right for your unique homebuying goals or financial situation. Need help determining which loan is best for your Raleigh home purchase? Connect with Janice Fowler at our Raleigh office today.