Do You Know Which Home Loan is Right for You?

Friday, November 11, 2016 | 7:33 pm

The kind of mortgage you choose has a big impact on how much you end up paying—how much you’ll have to pay upfront, your monthly payment amount and the total cost of your loan over time. It also affects the level of risk you take on. Knowing what kind of loan is most appropriate for your situation prepares you for talking to lenders and getting the best deal.

Where you live, how long you plan to stay put, and other variables can make certain home loans better suited to your circumstances, and choosing wisely could save you a bundle on your down payment, fees, and interest. To learn about all your options, check out these common types of home loans and whom they’re suited for, so you can make the right choice.

1. Fixed-rate loan – the most common type of loan, a fixed-rate loan prescribes a single interest rate—and monthly payment—for the life of the loan, which is typically 15 or 30 years. It’s great for homeowners who crave predictability and aren’t going anywhere soon.

2. Adjustable-rate mortgage – ARM loans offer interest rates typically lower than you’d get with a fixed-rate loan for a period of time—such as five or 10 years. It’s the best option for home buyers with lower credit scores. Since people with poor credit typically can’t get good rates on fixed-rate loans, an ARM can nudge those interest rates down enough to put homeownership within easier reach. These loans are also great for people who plan to move and sell their home FHA loan

3. USDA loan – USDA Rural Development loans are designed for families in rural areas. The government finances 100% of the home price—in other words, no down payment necessary—and offers discounted interest rates to boot. This is the best option for families in rural areas who are struggling financially. These loans are designed to put homeownership in their grasp.

4. Bridge loan – also known as a gap loan or “repeat financing,” a bridge loan is an excellent option if you’re purchasing a home before selling your previous residence. Lenders will wrap your current and new mortgage into one payment; once your home is sold, you pay off that mortgage and refinance.

For more information on home financing and loans visit Delaware Pacific at 959 E. Walnut St. Suite 250 in Pasadena and can be reached by calling (626) 486-1775. You can visit them at




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