Many people may wonder the answer is to that question. A good home loan depends on more than a few things. First, let's discuss the advantages of this loan type.
By knowing and understanding the real advantages, then you can compare one home loan to another as an educated buyer.
After all, you're busy and need to know right now what loan is going to be in your best interest.
Then we'll discuss an example of a good mortgage option. I want you to be able to compare the various home loan products. Each persons circumstances vary and you know your personal situation the best.
So let's start out with why a fixed rate mortgage is your best choice.
In my mind, the best advantage to you is the fact that with a fixed
rate home loan, you can count on having the same principal and interest
payment for the life of the mortgage. So what does this mean for you
and how can you benefit?
The number one reason you want the best fixed rate mortgage is because you can sleep better at night knowing your house payment will not change. Remember in the past we had what was called the "mortgage meltdown"?
What exactly was that and how can you avoid it in the future? In the past, lenders had the bright idea that they would let anybody that could fog a mirror buy a house. They dreamed up all these fancy loan products which made it possible for people with poor credit to buy a home.
I kid you not, I was in the business once. At our monthly meetings, my boss would have different lenders come in to pitch their "latest and greatest" loan product.
The problem was, they had made it so easy to get a mortgage, people were like sheep being led to the slaughter. Here I was a loan officer that needed to make living, but with the given lending environment it got very competitive.
Many loan officers were putting people in ARM's (Adjustable Rate Mortgage) loans which were designed for the first time home buyer with poor credit.
The loans were fixed for maybe 1-3 years, then they would start adjusting to the current market. The problem with this was the home owner was not really that educated on the dangers of the ARM. They were sold on the idea that with the house values on the rise, you can refinance in a few years and get out of the ARM product. That worked for a while. But as the old saying goes, what goes up must come down.
That's exactly what happened and housing prices started to fall and many people got caught in the ARM products. Thus the mortgage meltdown!
I was feeling really good because I did not play the game other loan officers did. They were in it for a quick buck, they did not care about the customer. All they could think of was their paycheck.
So the two advantages of a fixed rate mortgage is your interest rate stays fixed for the life of the mortgage and your payment will remain the same as well. The only thing that would cause your payment to change is the taxes and insurance if you have them included.
Now let's talk about an example of a best fixed rate mortgage!
The best fixed rate mortgage has always been the FHA home loan. Since 1934 this loan product has stood the test of time. Remember when I said earlier I was once in the mortgage business?
Well I'm very proud to say that I became the FHA expert in our area. I had other loan officers coming to me with questions. In fact even my boss would ask me questions.
I was determined to make sure the customer (like you in this case) was well informed on their options.
I strongly recommended the FHA home loan since I was convinced it was the best fixed rate mortgage. Without a doubt, it had been around through good and bad times. My goodness, since 1934!! Something must be good about it!
This is the home loan of choice. The vast majority of my customers went with my recommendation. You can be sure the chances are good that they have not lost their homes if they kept making their mortgage payments.
The best thing is for you to make an educated decision. This is the single biggest purchase you will make in a lifetime (at least for us little people) so be sure you know what you are doing.
I was always impressed with the people I met on the phone. If I could help you today, I would. I just can't.
However, no matter if you go with them or not, at least I can help you know what I think is the best fixed rate mortgage. Hopefully you can see the reason why I say that. I know you are very smart, otherwise you would not be here reading this. Use the knowledge gained here.
Ask for the FHA 203b loan when speaking to a loan officer since it is one of the oldest loan products out there and is the best!
Would you like to understand more about FHA home loan products? Best FHA Home Loans gives you tons of cool information to help you choose.
Have more questions? Good, Have a Question is a great place to ask an expert. Go ahead....pick my brain!
Go to House Buyer Solutions Home Page.
Oct 08, 19 08:33 AM
Hello, I have a question regarding USDA vs. FHA home loans. I am in the process of getting a home in the next month but was told I wouldn't be approved
Aug 05, 19 10:44 PM
Hi Help please! I am a first time home buyer, buying a home with my fiance'. He is selling his home currently on the market for $125K with no contingencies.
Apr 15, 19 12:36 PM
When buying a home out of state, should we wait for employment contracts? Or can we use our current state's bank? Find the answers here.
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