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Getting funded for a real estate purchase shouldn’t be something to dread. There are many different options when it comes to paying for your property. Grants can be obtained with some research and doing some paperwork. Loans, of course, are the most common form of payment for a piece of property.
The are several different types of loans that you can get approved for. A fixed loan is a loan that has a fixed interest rate for the life of the loan. These types of loans generally come in a 15 or 30 year term with a fixed monthly payment. Your monthly payment is split between the principle and the interest. This is often the best choice in a volatile market that has fluctuating rates.
Adjustable rate mortgages, or ARM, have a fixed interest rate for a period of time and then adjust yearly after that. The most common ARM’s are 5 and 7 year, but longer periods of the initial fixed rate can be obtained. The drawback to these types of loans is that you pay only interest with your monthly payments and when the loan matures, you are required to pay to balance in full or refinance again.
Government back loans are guaranteed or backed by the federal government. Two types of the these are the FHA loan that is backed by the Federal Housing Administration and the VA loan, which is backed by the Department of Veteran Affairs. These types of loans tend to have a maximum amount allowed for the loan, but that amount varies by county.
