Many home buyers and home owners may not know what type of financing benefits them. Not all homes are the same and may require different types of loans. Is the property a single family residence, duplex, condo, or a vacation property, for example? Are you purchasing a home or are you refinancing your home? These are the kind of questions your lender will ask you to help narrow down the right loan for you.
A fixed interest rate is where the principal payment remains the same throughout the duration of the loan. On the contrary an adjustable interest rate may change over time. Fixed interest rates are the most popular for a home loan due to the appeal of a consistent mortgage payment amount.
An adjustable rate mortgage (ARM) is a interest rate that may change over time. Adjustable interest rates may change periodically, usually in relation to an index (ex. London Interbank Offered Rate “LIBOR”), and payments may “adjust” up or down accordingly. Unlike a fixed interest rate, homeowners aren’t guaranteed the same monthly mortgage payments for the duration of their loan.
A primary residence is the main residence someone resides as their legal residence. The property can be a condo, a house, or multiple units that you live in most of the year. Primary residences tend to qualify for the lowest mortgage rates appose from a investment or vacation properties. For your home to qualify as your primary residence, here are some of the requirements:
You must live there most of the year.
It must be a convenient distance from your place of employment.
In addition, once you’ve purchased the property, you must occupy it within 60 days post closing. If you utilize the a VA loan, and you’re on active duty, your spouse can satisfy the occupancy requirement.
If you plan to turn the property into a rental property within 6 months of purchasing a home, you must classify it as an investment property.
Products Available: All loan products – FHA, USDA, VA and Reverse Mortgage
Programs Available: Down payment assistance and closing cost assistance (CA, NV)