Posts Tagged ‘home loans’

Reverse Mortgage Loan Information

A reverse mortgage is a mortgage loan or lien against your home that you do not have to pay back for as long as you live there. It’s similar to a home equity loan in the fact that you are taking equity out of your home in the form of cash. You can get the cash out from a reverse mortgage in several different ways:

• a single lump sum of cash paid at closing;
• a regular monthly payment made to you in the form of a cash advance;
• A credit line somewhat like a HELOC;
• Or a combination of any or all of these;

Pros of a Reverse Mortgage

• No Credit Check;
• No income needed;
• Can’t lose your home because you miss payments;
• You never have to repay the loan;

Cons of a Reverse Mortgage

• Create debt against your home and decreased equity in your home;
• Additional fees on top of normal closing costs;
• You have to completely own your home;
• You have to be at least 62 years of age to do this;

When should you consider a reverse mortgage? If you are not facing a financial emergency now, then consider postponing a reverse mortgage. Reverse mortgages are a very expensive way to get cash. Most lenders tack on additional fees on top of normal closing costs. The fees can be as much as 4% of the loan on top of normal closing costs.

Before you decide to opt for a reverse mortgage make sure you understand all the details. Do your homework and make sure you understand exactly what you are doing.

VA Home Loan Information

A VA loan is a type of mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs.  VA loans are designed to offer financing to American veterans or their surviving spouses. The goal of VA home mortgage loans is to make the lending process more available to veterans and easier financing options. VA loans are offered in areas where private financing may not be avaliable, such as rural areas and small towns. They also allow the borrower to purchase a property with no down payment.

As mentioned earlier VA home mortgage loans allow the veteran to finance 100% of the home without paying private mortgage insuracne (PMI) or without having to use other creative financing methods such as piggy back loans or 2nd mortgages.

The major drawback to a VA loan is a funding fee is paid directly to the VA. This fee can range from 0 to 3.3% of the loan. This amount can be financed in with the mortgage loan but could be a hefty chunk if the loan amount is large.

FHA Home loan information

FHA home loans are a great way to purchase or refinance your next home. When it comes to mortgages there many different possibilities for financing. The best way to decide which type of loan is best for you it to be informed and educated about all the different types of loans available (FHA and Conventional). Here is some valuable information about FHA home loans.

A FHA home loan is a mortgage that is insured by the Federal Housing Administration, a United States government agency.  FHA loans were designed by the government to allow lower income families an opportunity to purchase a home. Today FHA home loans allow borrowers to purchase homes with smaller down payments, less than perfect credit and higher debt to income ratios. There are disadvantages of FHA loans including PMI or mortgage insurance, more strict property requirements, maximum amount a loan can be, and possible additional income tax penalties if you sell the property too soon.

Before you decide which type of loan to pursue consider all the pros and cons of each type of loan.