Owning a home is something that each and every one of us desires. Unfortunately, paying in full is quite impossible for the majority, and seeking home loans are more favorable option.
If you live in Arizona and would like to own a home, here are several pointers that you need to know:
- Consider a Traditional Home Loan
A traditional home loan, also called conforming home loan is a type of mortgage that amounts to equal or less than the value calculated by Fannie Mae and Freddie Mac. To keep things simple, a conforming loan is one that sponsored or regulated by the government. Government agencies are more than willing to buy these properties on behalf of approved borrowers.
One of the main strengths of a traditional, conforming loan is they are feature less borrowing costs than those owned by private companies or privately-owned parties. They boast lower interest rates and are better matched based on a loan applicant’s information and requirements.
- Non-conforming loans
As the name suggests, a non-conforming loan is a type of mortgage offered to borrowers who fail to get approval for conventional loans. Although easier to obtain, non-conforming loans usually feature higher interest rates. In addition, mortgage companies usually assess additional fees and extra charges on top of regular home loan payments.
Non-conforming loans are also known as subprime mortgages. Potential homeowners that were turned down by either Freddie Mac or Fannie Mae usually resort to obtain subprime mortgages due to the high approval ratings.
- Adjustable Rate Loan
Adjustable-rate mortgage is a type of home loan that features an interest rate that constantly changes based on prevailing prime rates. Ever-changing market conditions are the main culprit for interest rates that adjust on a regular basis. Typically, an adjustable-rate loan changes once every year, thus homeowners who get approved for this loan should expect at least 12 to 30 changes in mortgage payments.