Choosing the Right Home Loan 

If you're ready to buy a new home, chances are you've already been saving in order to be able to afford the down payment. You've also probably been shopping around for the best mortgage options and monitoring interest rates to find the best loan option available. Unfortunately, there's not a loan option that fits all situations. Since there are a variety of different types of loans available, taking the time to research and determine which type of loan is right for you is actually a very important step in the home buying process.

Within the US specifically, there are 5 different types of loan options that have become the most popular mortgage options for buyers. To help you with your decision making process, let's take a look at the most popular loan options a bit further.  

CONVENTIONAL 

As the name implies, this is the most common mortgage option and it usually comes with the best interest rates. Ideal for repeat buyers, this loan requires a minimum 10 percent down payment. However, a 20 percent down payment is more standard. 

FHA

Stands for Federal Housing Administration. An FHA loan makes ownership more affordable with a lower down payment minimum and easier credit requirements. It's the best option for first-time buyers since it only requires a 3.5 percent minimum, but in general a 20 percent down payment is still the standard. 

ARM

Stands for Adjustable Rate Mortgage. This type of mortgage option is a bit more risky than the first two options as the interest rates usually start out lower than others, but fluctuate with the market and usually not for the best. Since interest rates are constantly fluctuating and are hard to accurately predict, choosing this type of loan option creates a large grey area for the unknown to occur when it comes to stabilized monthly payments. The down payment is a 10 percent required minimum, but once again 20 percent is usually the standard. 

USDA

Stands for The United States Department of Agriculture. Ideal for investors, this mortgage option was developed to promote the purchase of rural land. That's why there's a zero percent down payment required. Unfortunately, this type of loan option only applies to a certain type of land that must be properly classified by the USDA. 

VA

Stands for, Veteran Affairs. This type of loan takes away the need for a down payment without risking a paid monthly interest (PMI). It is only available to military veterans. 

Buying a Home 

Now you're ready to invest in a home. If you haven't already, it's time to start working with a realtor to help you find and buy the home of your dreams. Before you put an offer on a house, finding the right realtor in the area you're looking to live in is crucial. If you're looking to move to South Orange County or are an existing South Orange County resident looking to find a new home in the area, I'd love to help. With extensive knowledge of the buying and selling process, along with more than 15 years of residency in the area I can help you find and buy the home that's right for you. The market is hot right now too, so don't wait to contact me and get started.