MCS Mortgage offers all kinds of loans to homebuyers in Florida, Maryland, and Virginia. These include common loans like VA, FHA, USDA, Home Equity, and adjustable-rate mortgages (ARM). Each loan offers different benefits and knowing which one is best for a potential homebuyer is going to depend on both the buyer’s financial goals and needs.
VA Home Loans
The US Department of Veterans Affairs (VA) offers housing programs to veterans, servicemembers, and eligible surviving spouses who are interested in becoming homeowners. These include programs that will assist with home purchasing, home construction and repairs, and more. Since the VA guarantees a portion of the loan, veterans and servicemembers are granted more favorable terms from private lenders.
Benefits of VA Home Loans:
- Lower interest rates
- Exemption from making a down payment in most cases
- Exemption from private mortgage insurance (PMI)
- Limited closing costs
- Lifetime benefit
FHA Loans
Under the US Department of Housing and Urban Development, the Federal Housing Administration (FHA) protects lenders against loss by insuring home loans. As such, first-time homebuyers and buyers with poor credit history can qualify for an FHA loan on both single family and multifamily homes throughout the United States and US territories. Bankruptcy and past financial setbacks do no disqualify homebuyers from applying for an FHA loan.
Benefits of FHA Loans:
- Lower credit score requirement
- Lower down payment
- Lower closing costs
USDA Loans
The US Department of Agriculture (USDA) offers loan programs for homebuyers interested in purchasing properties located in rural areas or areas outside of suburbia. The USDA offer three different types of loans: direct loans, home improvement loans, and loan guarantees. These loan types are available for both single family and multifamily homes, community facilities, rural businesses, water and environmental. USDA loans are ideal for low-income homebuyers as they offer lower interest rates than conventional loans and sometimes get the option of no down payment.
Benefits of USDA Loans:
- Interest rates as low as 1%
- Lower to no down payment
Adjustable-Rate Mortgage
Adjustable-rate mortgages (ARM) are home loans with adjustable interest rates that change over a period of time based on the market. Interest rates for ARMs start at a lower rate than the market rate and will remain constant for a fixed period of time. Once the initial term passes, the interest rate will adjust to a new interest rate based on the current market rates at a pre-arranged frequency. These loans are ideal for homebuyers who can pay off their mortgage in a shorter timeframe.
Benefits of ARMs
- Lower introductory interest rate
- Interest rate remains constant until the next adjustment period
- Interest rate will lower when the market rate is lower
Home Equity Loans
As the name suggests, home equity loans leverage a borrower’s home equity as collateral for borrowing money. This means a lender can repossess a borrower’s home if they default on the loan. Often referred to as a “second mortgage,” home equity loans do not replace an existing mortgage, which means homebuyers make separate payments in addition to their primary mortgage. There are no restrictions on how home equity loans are spent.
Benefits of Home Equity Loans:
- Easy to qualify for
- Fixed low interest rate
- Longer term than other loan types
- Funds are immediately available
- No restrictions on how money is used
To find out which loan is best for you, contact MCS Mortgage for more details.