The process of choosing a loan and a lender can be quite complicated but if you tackle it in stages you can avoid disappointment, frustration and wasted time. In choosing a home loan that's right for you, the considerations you have to think about are:
(1) your needs, (2) the associated costs, and (3) the home loan features.
Considering your needs means answering questions like, "Do you want to make the minimum payments only?"Or "Do you want to be able to extend the loan in the future in case you're unable to pay?" Knowing what mortgage payment you can afford and is the first step into the whole process. Tampa mortgage rates for 2010 are available and are updated online so you can check them before making any decision.
The associated costs include interest rates, current mortgage rates, and fees. Mortgage lenders generally use a ratio of 36% as the guideline for how high your debt-to-income ratio should be. A ratio exceeding 36% could be seen as risky, and the lender will likely either deny the loan or charge a higher interest rate.
Luckily, loan calculators are available online now, so you can do your computations faster and more accurately.
Now it's time to shop for home loans. Like any ordinary shopping process, you have to know the key features of the product you're buying. Here are some home loan options you can choose from:
FHA Loans—or Federal Housing loan is ideal for first timers and middle to low-income borrowers. The FHA loan requires only small down payments; has no penalty payments; and will allow large sum loans when reasonable. Also includes the 203k loan or203k Rehab loan.
VA Loans—or Veteran Affairs loan is a mortgage option which provides American Veterans with financing assistance with their properties. The VA loan allows 100% financing without private mortgage insurance.
USDA loans—this loan is offered strictly for rural areas and is ideal for low and moderate-income families. The USDA loan is a government insured 100% purchase loan.
Reverse Mortgage—also known as a "lifetime mortgage" where senior citizens are allowed to make zero payments and all interest is added to the security interest on the property. Reverse mortgages helps in the release of the home equity in the property so as to use it for a single or multiple debt payment.
Refinancing—has low interest rates. This can help you reduce costs if you have an existing loan, but should be taken with caution if used for consumer purchase (like buying a car). If it lowers your rate by two percent, then choose to have your mortgage refinanced.
Do the math before making a choice. Factor in how much debt (including your spouse if applicable) you can handle with a 36% ratio by multiplying your monthly gross income by .36, which will give you your total allowable monthly payments. After getting the product, add all other existing loans and payments. This will give you your total monthly debt payments. Finally, subtract your total monthly debt payments from your allowable monthly payments. The answer will be your maximum mortgage payment. You can then make a sound decision of what you can or cannot afford. In addition to doing the math, keeping your self updated with current mortgage rates and canvassing for lenders with low mortgage rates should be kept in mind always.
Look for a trusted and government certified home loan company that can provide your mortgage needs. Try Marimark Mortgage LLC. They serve the states of Florida and Virginia.
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