The Lowdown on Home Loans

What is a Home Loan?

The purchase of a property might represent the single most valuable asset a person acquires in their lifetime. If that property is a home, then it is highly likely that a home loan will be needed to make the investment possible. Loans are not unfamiliar territory – finance is often needed for the purchase of vehicles or business equipment, for example, so how do home loans vary from other kinds?

The key difference between home loans and other sorts of loans is the terms and conditions that are attached to a home loan, or mortgage, arrangement. Usually a home loan is repayable over a fairly lengthy timescale – traditionally somewhere between 15 and 30 years. A deposit has to be paid in order to secure a loan, and this is normally a percentage of the value of the property; in different neighborhoods, cities or states this could be anywhere between 5% and 20% of the property value. Interest rates and types of mortgages vary considerably, but the bottom line is that the borrower commits to repaying the loan over the term, or the number of years agreed, and at the end of that term the property is free of debt – the owner’s home is their castle.

Understanding Terms and Conditions

Very few people can afford to buy their home outright, and home loans often make it possible to get started on the property ladder, or to upgrade when a growing family demands more space. Sometimes a property is in need of a bit of fixing up; extending an existing home loan, instead of taking out a new loan with a bank or finance company, can help with this too.

With so much choice available, the terms and conditions attached to home loans are very important. For example, a conventional mortgage might have a slightly higher rate of interest than a flexible one, but the monthly funds required will stay the same throughout the repayment period of the loan. Flexible, or adjustable-rate mortgages (ARMs) generally have lower introductory rates of interest fixed for maybe five or seven years. After this, the rate will fluctuate every year during the rest of the repayment period.

There are also government-insured home loans via the Federal Housing Administration (FHA) or the Veterans Administration (VA), serving buyers of more modest means and properties, and jumbo loans for high-flyers in a high-priced property market.

Finding the Right Home Loan

Standard mortgages are a safe bet – they suit people who have a good credit rating and do not mind slightly higher interest rates because they are comfortable with payments that will remain fixed and steady over the years.

ARMs have variable rates after the initial fixed period but – unless interest rates soar unexpectedly – generally a lower cost overall. They are useful for homeowners who plan to move on within reasonably short time periods, say five years.

FHA and VA loans have a low interest rate and a low down payment, and are most suitable for cheaper properties and buyers who have a medium credit rating.

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The Lowdown on Home Loans

What is a Home Loan?

The purchase of a property might represent the single most valuable asset a person acquires in their lifetime. If that property is a home, then it is highly likely that a home loan will be needed to make the investment possible. Loans are not unfamiliar territory – finance is often needed for the purchase of vehicles or business equipment, for example, so how do home loans vary from other kinds?

The key difference between home loans and other sorts of loans is the terms and conditions that are attached to a home loan, or mortgage, arrangement. Usually a home loan is repayable over a fairly lengthy timescale – traditionally somewhere between 15 and 30 years. A deposit has to be paid in order to secure a loan, and this is normally a percentage of the value of the property; in different neighborhoods, cities or states this could be anywhere between 5% and 20% of the property value. Interest rates and types of mortgages vary considerably, but the bottom line is that the borrower commits to repaying the loan over the term, or the number of years agreed, and at the end of that term the property is free of debt – the owner’s home is their castle.

Understanding Terms and Conditions

Very few people can afford to buy their home outright, and home loans often make it possible to get started on the property ladder, or to upgrade when a growing family demands more space. Sometimes a property is in need of a bit of fixing up; extending an existing home loan, instead of taking out a new loan with a bank or finance company, can help with this too.

With so much choice available, the terms and conditions attached to home loans are very important. For example, a conventional mortgage might have a slightly higher rate of interest than a flexible one, but the monthly funds required will stay the same throughout the repayment period of the loan. Flexible, or adjustable-rate mortgages (ARMs) generally have lower introductory rates of interest fixed for maybe five or seven years. After this, the rate will fluctuate every year during the rest of the repayment period.

There are also government-insured home loans via the Federal Housing Administration (FHA) or the Veterans Administration (VA), serving buyers of more modest means and properties, and jumbo loans for high-flyers in a high-priced property market.

Finding the Right Home Loan

Standard mortgages are a safe bet – they suit people who have a good credit rating and do not mind slightly higher interest rates because they are comfortable with payments that will remain fixed and steady over the years.

ARMs have variable rates after the initial fixed period but – unless interest rates soar unexpectedly – generally a lower cost overall. They are useful for homeowners who plan to move on within reasonably short time periods, say five years.

FHA and VA loans have a low interest rate and a low down payment, and are most suitable for cheaper properties and buyers who have a medium credit rating.

93,518 Responses to The Lowdown on Home Loans
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  2. extract email from facebook group
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  3. Erma
    June 15, 2019 | 11:49 am

    Heya i am for the first time here. I came across this board and
    I to find It truly useful & it helped me out much. I’m hoping to give
    one thing back and help others such as you helped
    me.

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  7. Roses That Last a Year
    June 15, 2019 | 12:29 pm

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    There’s a lot of folks that I think would really enjoy your content.
    Please let me know. Many thanks

  8. Roses in a Box
    June 15, 2019 | 12:40 pm

    Hmm it seems like your website ate my first comment (it was super long) so
    I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog.
    I too am an aspiring blog writer but I’m still new to the
    whole thing. Do you have any recommendations for beginner blog
    writers? I’d genuinely appreciate it.

  9. LouisErush
    June 15, 2019 | 12:50 pm
  10. Roses in a Box
    June 15, 2019 | 1:06 pm

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  11. RobertIdeli
    June 15, 2019 | 1:18 pm

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  12. locksmith near me.
    June 15, 2019 | 1:25 pm

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  13. Long Lasting Roses
    June 15, 2019 | 1:32 pm

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    I’d really love to be a part of online community
    where I can get responses from other knowledgeable individuals that share the same interest.
    If you have any suggestions, please let me know.
    Kudos!

  14. Improve windows vista
    June 15, 2019 | 1:39 pm

    Everything said made a ton of sense. However, think about this, suppose you added a little information? I am not suggesting your information is not solid, however suppose you
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  17. Roses That Last a Year
    June 15, 2019 | 1:52 pm

    I was curious if you ever thought of changing the page layout of your
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    But maybe you could a little more in the way of content so
    people could connect with it better. Youve got an awful lot of text for
    only having one or two pictures. Maybe you could space it out better?

  18. Kimesses
    June 15, 2019 | 2:27 pm
Leave a Reply


Wanting to leave an <em>phasis on your comment?

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