The Federal Housing Administration guarantees FHA loans, which aim to help qualified Americans purchase their own homes in states such as Missouri. It lets people with low credit score ratings borrow money from a lender through a low down payment.
It’s a great option for people who can’t afford to pay at least 20 percent for their down payment or those who have low credit score ratings. It also has several types of mortgages. Let’s discuss some of them.
Conventional Fixed Rate Home Loan
These are home loans set with a specific interest rate in a certain amount of time. It means that your home loan payment will stay the same throughout your loan’s lifetime.
The only time that it’ll change is when there are fluctuations in homeowner’s insurance and property taxes Fixed rate home loans usually don’t have any assumable and usually have a prepayment penalty.
Conventional Adjustable Rate Home Loan
These have interest rates that are fixed for the first 3–5years but then rise afterward. It’s a great option for homeowners who are only planning to stay in their home for a period until the loan’s interest rate changes.
Hybrid Home Loan
This is almost the same as adjustable rate home loans, only its period is usually much longer. A hybrid home loan commonly has a fixed interest rate for at least ten years from the start of the loan until it changes after that.
It’s advisable for people who want to spend several years on the property until they decide to move to a different home.
Balloon Home Loans
This loan is another option for homeowners who want to make a small payment at the start of the loan and then pay everything off later on. It’s ideal for people who know that they’ll have enough money to pay it off in the future.
It’s also great for people who can only make small payment but can guarantee that they’ll have enough money to pay the loan completely in the future.
These are just some of the loan options available for people who are eyeing an FHA loan. It’s always better to ask a professional’s advice for further assistance when it comes to mortgages.