If you are to go back in the early 1900s, you will see that only about ten percent of households own their houses. Most are either renting in an apartment or home and for some, living with relatives. It was only in the 1930s when mortgage loans were introduced that you will see changes. From that time, more and more Americans started to own their houses.
In modern America, you will see that it is no longer that difficult to purchase a house. As long as you comply with all the requirements necessary, you are good to go. And paying it off is not heavy on the pocket since it usually takes ten to thirty years to repay it. Furthermore, there are many lenders just like the Jumbo mortgage Texas that offers flexible terms so you will feel confident in taking one out.
However, you also have to note that there are many different types of mortgage loans. You may get overwhelmed, trying to learn all of them. If you are a first-time borrower, it is better if you go for the most popular ones based on different borrowers. While your situation may be different from them, it still narrows down your options.
The most popular type of mortgage loan outside the government-insured ones is the traditional mortgage loan. It is prevalent since you can quickly get approval for this type of loan. The primary requirement is for you to have a good credit history. You also need to have a credit score of at least 640.
Furthermore, you need to prepare a down payment of at least ten percent of the total cost of the property. It is a lot lower than the standard twenty percent down payment. When it comes to the repayment terms, it is also borrower-friendly since it offers the interest-only payment option. You can always use this option for a few months whenever you have some financial difficulties. However, we do not recommend you to use it for a long-term as it will not lower your principal balance, and it will just extend the life of your loan.
VA Mortgage Loan
If you are a veteran or a family member of a U.S. veteran, then you may opt to choose the VA mortgage loan being offered by the Department of Veterans Affairs. It is considered as one of the best since most of the time; they provide the no down payment feature. If there is a down payment, it is often at three percent of the cost of the property, making it the type of loan with the lowest down payment.
The FHA loan, on the other hand, is the most popular type among first-time borrowers. It often offers many different perks for them. But, it also offers the same loan but with varying benefits to other borrowers. It is the favorite since the down payment is often only at 3.5 percent of the value of the property. However, it is also one of the most difficult ones to get approval. The requirements and process are rigorous.