Mortgage Loan Options

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You've Mortgage Loan Options Greenville SC probably heard the terms "mortgage loan options" and "lending options." What exactly do those terms mean? Do they have any relevance to the current real estate market and housing prices in your area? Let's examine the basics.

There are many different key ratios, which lenders use when determining your potential ability to secure a mortgage loan on your first home. The first, and most important, of these key ratios is your down payment. Most mortgage loans are based on your credit rating as well as your income. This credit rating and income rating combination are referred to as your "credit risk." Use calculator tools to determine if you qualify for any mortgages.

Mortgage Loan Options. If you are having trouble getting qualified for mortgage loans, you may want to look into mortgage loan options. There are quite a few federal and state programs available to help homeowners who are experiencing difficulty securing loans and who need some help. In addition to mortgage loan options from the government and your local banks, there are also non-traditional financial assistance programs like the Home Buyers' Affordability and Self-Help initiatives, or the HAMP program. For more information on these programs, contact your local housing authority or visit the web sites of the U.S. Department of Housing and Urban Development or the Federal Housing Authority.

Your Credit Score. Another important ratio to determine if you are eligible for mortgage loan options is your credit score. Most people have been told for years that their credit score is the single most important financial indicator. If you're in a financial bind and need some mortgage advice, you should consider talking with an independent mortgage consultant or a credit score expert about your credit score.

New Home Equity Line of Credit. One of the most popular mortgage loan options for those with credit issues is a new home equity line of credit. This type of new loan is used to pay down debts and pay down other personal loan debt at the same time, so in effect it is like two mortgages taken out at the same time.

Fixed-rate Mortgages. Most borrowers opt for fixed-rate mortgages because they are offered at lower interest rates over the life of the loan, although there are variable-rate mortgages available as well. Generally, a fixed-rate mortgage can save you money if interest rates are falling. On the other hand, there are risks in variable-rate mortgages; you could end up paying more in the long run because you could easily fall into default.

Adjustable Rate Mortgages. An Adjustable Rate Mortgage allows you to choose a different interest rate over the life of the loan, making your payments more predictable. This option works well for borrowers who need a lower monthly payment, but do not necessarily want to change their home's interest rate. However, this type of mortgage is not right for some people. Adjustable rate mortgages come with terms such as higher initial payment amounts and longer terms, which make them less appealing to some potential borrowers.

Private Mortgage Insurance. Private mortgage insurance is a third option for borrowers. This type of mortgage insurance covers the lenders if you become unable to pay your mortgage, thereby allowing you to protect your lender in case of bankruptcy. Private mortgage insurance also offers added security to lenders; if you have poor credit, you can find private mortgage insurance that helps you make payments while you improve your credit history. Lenders will check your credit history and may require you to co-sign a loan agreement, which means they will trust your finances more if you have poor credit.