Thinking about buying a new home? We have information that can help!
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Finding the Right Mortgage
Not only do we make it easy to fall in love with a Kendall Home, but we stay with you throughout the home buying process. We want to ensure that all of the details fall into place smoothly – even when it comes to selecting the right mortgage for your new home purchase.
We understand that this exciting time can also be overwhelming. There are many mortgage options available, many of them focused on the first time homebuyer, and choosing how you will finance your home is one of the biggest decisions you will make in your lifetime! That is why we have outlined some of the key information that can help you navigate your options.
The 3 Most Common Government-Funded Mortgage Options
The three most common government-funded mortgages options are FHA loans, USDA loans, and VA-backed loans. The type of loan you get will largely depend on your individual situation. The FHA loan is a great option for most first-time home buyers, but it is good to explore all options to make the most educated decision.
- FHA (Federal Housing Administration)
- Guaranteed by the Government
- Offer the option of a low down payment (typically 3.5%)
- Lower closing costs and Easier qualification standards make this loan a popular choice among first-time homebuyers.
- USDA (United States Department of Agriculture)
- USDA loans fund mortgages for homes in more rural areas with a lower population
- Offer favorable rates and 100% financing, no-money-down move in
- Easier qualification means you get the loan faster
- Also popular among first-time homebuyers
- VA (VA-backed Loan)
- Those who are serving (or have served) in the military may be eligible
- Federally guaranteed – in the unlikely event you must default on the loan, the government pays your lender what is owed
- No downpayment, zero-money down move in
- Very favorable interest rates
- Click here for more information on VA-backed loans and eligibility.
Mortgage Interests Rates: Fixed vs. Variable
One of the major features of your home loan that you will need to consider is the type of interest rate tied to the mortgage. Interest rates fall into two categories: fixed and variable. A fixed interest rate will remain the same for the life of the loan whereas a variable interest rate may be fixed for a certain period of time, but then fluctuate over the life of the loan. The type of interest rate will also depend on your individual situation but here are some pros and cons of each.
Fixed Interest Rate
- Payments are not prone to fluctuations
- Always know what your mortgage payments will be
- Offer a sense of security
- Can be harder to qualify for
- If the rates drop in the future, you could be stuck paying a higher interest rate than others who have variable rate mortgages
Variable (Adjusted Rate)
- Can be easier to qualify for
- Initial monthly payments can be lower than fixed interest rates
- When the interest rates go down, your monthly payment will also go down
- No security in knowing your mortgage payment will always be the same
- Harder to budget for
- Monthly payments can increase with adjustments
Now that you know some of the basics, contact us and we will connect you with a mortgage specialist who can help you determine which loan is right for you.