The financial landscape hasn’t changed that much over the past few years, leaving home loans as the most frequently chosen option for people who want to move into the house of their dreams. In fact, getting the keys to your perfect abode is a long process.
The first of many steps on this journey of yours is getting as much information as possible on all kinds of loans, ranging from land to VA construction loans. This is why we have decided to offer some help by putting together a list of home loans that you should definitely know about.
Since there are more than 21 million veterans of the U.S. armed forces, we have decided to include the VA construction loan on our list. Veterans share a dream with many other people, the dream of building a custom home, but since they are as not informed as they should be, some of them are not aware of the available VA construction options.
The VA construction loan program is a no down payment program, but at the same time you will need to have at least a 620 credit score to get the loan from the VA lenders. Currently the main issue for VA borrowers is to find a lender willing to give them a construction loan.
The best possible route for VA borrowers is to get informed by talking with as many banks, construction firms and financial institutions as possible. This will help the veterans chose to work with a partner that offers the best terms.
In some instances, people prefer to go step-by-step, as they don’t have enough financial assets or a high enough credit score to get into the house loan process. For these people getting a piece of land where they will build their estate is the primary concern. You should know that there are special types of loans that can help you buy the plot of land you’re interested in.
Where can you seek information about these land purchase loans? Your first stop should be all the local banks. Ask their representatives about the land purchase loans, the process and credit score requirements.
You should know that banks look at land purchase loans as riskier loans, because the collateral doesn’t have the value that it would have if there was a household built on it. This is why you will see higher figures on down payments and interest rates on these loans than on others.
If we are going to rate loans by popularity, then home purchase loans are the absolute winners. If you take a look at any bank or financial institution, the chances are that you are going to find at least one available home purchase loan option for yourself.
When it comes to the age of the house you want to buy, there are no restrictions. Home purchase loans are designed to cover your expenses whether your are buying and old farm house or a brand new residential property.
How much money do the lenders give in this instance? Usually, this amount doesn’t go above 85% of the market value of the house. As with any other loan, do your best to get as much information as possible.
These loans come with different interest rates, so make sure to check the terms before you make your final decision and look up the difference between fixed and floating interest rates.
If you would like to add a new room or an entirely new floor to you home, then you should know that there are loans specifically designed for this scenario – home expansion loans.
As the banks define them, home extension loans cover the expenses tied to the alteration of the current home structure. Usually, people take these kind of loans when they wish to add a balcony, bigger bathroom or make significant home improvements.
In the end, you should know that these kind of loans may hide behind different names, such as home extension and home improvement loans.
These four home loans are the ones that most people are interested in. They are designed to help you construct or purchase the home of your dreams. As you can see, the most important thing is to stay informed and make sure you know your interest rates and possible penalties.