From Charity Ohlund, Marketing Director
The conventional 30-year mortgage is by far the most popular and well-known product on the market. In fact, they make up about 75 percent of all new mortgages each year.
But don’t feel like you have to follow the crowds to get smart home loan. In fact, this could cost more money – sometimes MUCH more – if used incorrectly.
If you are thinking about buying a home or refinancing your existing mortgage, we want to make sure you make the right choice for your particular situation. Consider putting any of these three mortgage products on your radar:
- USDA loan
You may feel more at home in the pasture than on the sidewalk. In that case, buying a home might be within your reach thanks to the U.S. Department of Agriculture’s mortgage program. Although these loans are subject to income restrictions for borrowers – Check the table here – and USDA loans are technically reserved for homes in “rural” areas. You’d be surprised how much of America actually qualifies for these mortgages. It is said to be around 97% of all US land masses! What is special about a USDA loan? The biggest advantage is that no deposit is required. Whenever you find a home in a USDA-eligible area, you should definitely consider giving a USDA loan a serious look. Given that most loans require at least 3% to 10% less, this can translate into significant savings to begin with.
Other benefits include lower interest rates and lower mortgage insurance costs – in this case called guarantee fees. When you put it all together, it translates into savings, a much easier route to home ownership and, of course, fresh air.
- 15 year mortgage
The 30-year mortgage may be the standard model for most borrowers, but you should consider that it is the short-term little brother, the 15-year loan. These mortgages come with lower interest rates, faster payback times, and the ability to build up equity much faster than 30 year loans. Yes, the monthly payments are a little higher, but they are well worth it if you have room in your budget. At today’s average rates, you would save more than $ 80,000 in interest by choosing a 15 year mortgage versus a 30 year mortgage with a loan amount of $ 275,000. (And who couldn’t use an extra $ 80,000 in the bank?)
- Streamline Refinancing (if you have an FHA or VA loan)
Both FHA and VA loans have an optimized refinancing option, which is essentially a quick route to a new mortgage loan. Often times, you don’t need a credit check, home valuation, or a lot of paperwork, and you can close your loan in just a few weeks. Typically, the closing costs are also lower, which can save you both time and money.
It doesn’t stop there
There are many other mortgage options as well. So be sure to speak to one of our talented loan officers Well mortgage for a free consultation and a little guide. They can point you to a loan that suits your specific needs and budget, as well as your long term goals as a homeowner.
This weekly sponsored column is written by the staff of Fountain Mortgage. Located in Prairie Village, Fountain Mortgage is dedicated to educating and empowering clients to make the best financial decision possible for their situation. Contact Fountain today.
Mike Miles NMLS ID: 265927; Well Mortgage NMLS: 1138268