| If you've been shopping around for a new mortgage | | | | days are over. The most you can borrow now would |
| or even a refinance loan you've probably noticed there | | | | be 90-95% of the home's value. |
| have been quite a few options added over the years | | | | 4) Home equity Line of Credit. Basically similar to the |
| to the standard 30 year fixed rate mortgage. In fact | | | | second mortgage/Home equity type of loan except |
| there are at least six basic types of loans that can be | | | | that the amount of the loan is flexible and can be |
| offered to the prospective borrower. The information | | | | borrowed and used as needed. The equity in the |
| provided should outline the basics and the pros and | | | | property determines the total amount that can be |
| cons of each type. | | | | borrowed. |
| 1) Home Purchase Mortgage - This loan can be | | | | 5) Construction Loans. This loan period varies |
| secured by obtaining fixed rate mortgage quotes or a | | | | depending on the construction schedule. It's main use is |
| variety of adjustable rate or balloon mortgage loans. It | | | | to pay the builder while your home is being |
| is the most widely method homeowners use to | | | | constructed. When the home is complete the |
| purchase a home. Requires a down payment and loan | | | | construction loan is then converted to a predetermined |
| repayment terms between 10 and 40 years. | | | | traditional mortgage. |
| 2) Refinance Home Loans. These loans are offered to | | | | 6) First time home buyers loan. This type of loan is a |
| secure lower interest rates in some housing markets. | | | | traditionally structured mortgage but with special terms |
| They are also used to cash out equity in your home | | | | that offer incentives to the first time buyer in the form |
| for other expenses. Make sure you calculate the cost | | | | of low closing costs, down payment amounts or other |
| of the closing costs of the refinance and make sure it | | | | advantages. |
| beats the cost of retaining the existing loan. | | | | These are the 6 basic types of home loans. Of |
| 3) Second Mortgage or Home Equity Loan. This is | | | | course lenders offer many different options to |
| usually done for reasons similar to refinancing but only | | | | customize their offerings and compete with other |
| the amount of equity in the home is available. Recent | | | | lenders. It is up to the borrower to properly research |
| history indicates that the second mortgage loan | | | | these loans select the right loan for their needs. |
| amount can reach 125% of the home value but those | | | | |