Buying your first home can be exciting but also overwhelming. There are so many choices; how do you know which is the right home loan for you? There are a few factors to take into consideration.
Fixed vs. Adjustable Rate
One of the first decisions to make is the type of interest you are going to pay. A fixed-rate loan starts at a higher interest rate that remains stable throughout the term of the loan. An adjustable-rate loan starts at a low rate that adjusts according to the market over time. A fixed rate means that your monthly payment doesn’t change, but you may end up paying more in interest overall. An adjustable rate can save you money if you plan ahead for when your monthly payments increase.
Conventional vs. Government-Insured
Many new homeowners qualify for conventional loans that are not insured by any government entity, but if you don’t, you still have options. FHA, USDA and VA loans are government-insured loans offered by Sun West Mortgage. These loans can lower your down payment, which increases the overall amount that you end up paying but may make home ownership a possibility even sooner than you planned.
If you are shopping for home loans, it can be easy to become discouraged. Looking at all the options available to you can help you find the loan that helps you buy your home.