Are you looking for a home loan, but you are not sure which one is right for you? There are many separate types of home loans and it can be very confusing to try to pick the best choice for yourself. Here are 7 separate types of home loans and what they should be used for.
The first one is the primary purchase mortgage. This is a home loan you get to buy an existing home. Be meticulous not to do the 100% financing choice because you will start with no equity and it will take you 10 years or so to build any real equity. You should always put at least 10% down.
Home Loan
The second type of home loan is a refinance loan. This is a loan that is used to get a lower rate, pay off debt against your home, or to add on to your home. This is a first mortgage that is usually in the middle of 80% and 90% of the value of your home. Make sure the benefits of your refinance out weighs the loan itself.
The third loan is the second mortgage. This is similar to a refinance, but can go up to 100% and sometime 125% of your home value. These are used in emergency situations, especially the 125% loan because the rate is much higher and you will be tying up all your equity.
The fourth separate type of home loan is the construction loan. This is a loan that is used to start construction a home. It has 4 stages of funding as the home is build and if you are not quite wealthy, then you are wasting your time building. It usually takes a new home colse to 10 years to appreciate to the value of the primary construction loan.
The fifth type of loan is the first time home buyers loan. This is a purchase mortgage that is designed for anybody that is purchasing their first home.
The sixth type of loan is the home equity loan. This is similar to a second mortgage, but many times the rate is prime plus a percentage. These are good for citizen that just need a dinky bit of money.
The seventh separate type of home loan is a line of credit. This is a revolving inventory that works much like a prestige card only your home is the collateral. These are good for citizen with a company or with an expanding to their home because if either one gets more high-priced than planned for you can take out more money on your line of credit.
There you have it, seven separate types of home loans. Now you just need to pick the right one for you and start applying.
dissimilar Types Of Home Loans - 7 dissimilar Types Of Home Loans
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