Thinking of Buying a Home?

When purchasing a new home, you will have several types of loans to select from. Each type of loan has pros and cons. Before agreeing to a loan, learn about the different home loan types.

If you are a first time buyer, chances are you will need a first mortgage loan. With this type of loan, you will need to undergo a credit check. The home will also need to be appraised. In some states, the home may also need to be inspected. With a first mortgage, varying maturities are in place. For most home buyers, a 30 year maturity will be recommended. However, if you can get a 15 year maturity, interest paid is significantly less. A down payment may also be required. After making a significant amount of payments,you may decide to take out a second mortgage. When taking out a second mortgage, you can use the funds for what ever you see fit. However, you will have a second mortgage to pay each month. Be warned, most lenders will not allow you to take out more than 80 percent of the appraisal value of your home.

After owning your home for a period of time, you may notice that improvements need to be made. If this is the case, a home improvement loan can be considered. Unlike a mortgage, the maturity length is much shorter. Monthly payments are also larger with this type of loan.

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