3 Loan Options Offered By Home Financing Services
Buying a house is a significant investment for many reasons. It's a place to call home, an investment for the future, and it can be a source of pride for many individuals. Unfortunately, buying property isn't that straightforward. It requires financial commitment on your part, which can be difficult if you don't already have financing. Luckily, home financing services can help you circumvent this issue. The following loan options are provided by these services.
FHA Loans
These loans are often used by borrowers who do not qualify for conventional loans due to low credit scores, insufficient income, or other reasons. They are also popular with first-time homebuyers because they are easier to qualify for. FHA loans require borrowers to pay an upfront mortgage insurance premium, which is typically rolled into the loan amount. Luckily, they come fully insured and guaranteed, reducing a lender's risks while increasing better deals on interest rates. The Federal Housing Authority defines the guidelines for these loans, including the maximum amount of financing, interest rates, and fees.
Bridge Loans
If you are looking for a short-term loan, bridge loans can be an excellent option. They can help you if you need money for repairs or renovations before you can sell your home. Moreover, if you are going through a divorce and need time to stay in the house until everything is finalized, these loans can be a great help.
Bridge loans are repaid when the sale of a home has been completed. The payments may be interest-only during the time you own your home or they may be principal and interest. Although they're similar to a home equity line of credit, they do not draw down your equity on the property. Instead, they use any cash you have on hand as collateral. When considering a bridge loan, make sure you ask your lender about any fees and the interest rate.
Home Equity Loans
These loans enable borrowers to borrow a lump sum of money, which they can use to pay off credit card debt, make home improvements, or make another large purchase. The interest rates on these loans are usually lower and the credit requirements are more flexible. Applying for them is also straightforward. You only need to provide some basic information about yourself and your property and let the lender know how much you want to borrow. If your request is approved, the money will be deposited into your account. Home equity loans can come with a prepayment penalty, so it's important to go through the fine print to ensure you know the terms and conditions.
There are three different loan options offered by home financing services, which can be used for a variety of needs. Working with a financial professional will help you determine the best option for your situation. For more information, contact a home financing service near you, such as FNCB Bank.