We all want to own a new home, or better still refinancing an existing home to get a better rate. However, getting the financing for your new home can be complicated. Therefore, you ought to look for the best mortgage rates possible so as to fund your ambitions. Since home ownership is a vital aspect for the people living in Solon, OH, Wirefly has come up with a better way of helping you find the best home loan rates in town. With these tools, you can get the best rates for you thus saving a lot of time and money in the long run.
How People Get the Best Home Loans in Solon, OH
Individuals who want to plant their roots down in Solon, OH and buy a home in the area are probably going to require some type of home loan to finance the purchase. Fortunately, lenders will make a home mortgage available to individuals who have a good credit history. This is one reason why people want to make sure that they pay their financial obligations on time. If they ever go to purchase a home in the future and have a poor credit history, they may not be eligible for a home or will have to pay a higher interest rate.
There are a few ways that people can attain a new home mortgage. Often, their real estate agent will be working with an individual and recommend their services. While this sounds like an easy path to take, it is still a good idea to compare mortgage rates in Solon, OH. By going online and searching for different home loan options, a person can try to save some money by obtaining the lowest interest rate that they can find. Many individuals don't realize how just a .25 change in their interest rate can save them quite a bit of money when it's spread over a long period of time. Wirefly makes the process of searching for the best mortgage rates in Solon, OH much more efficient than trying to compare and analyze rates themselves. This allows a homebuyer to spend their time with other factors such as planning their move.
Mortgage Types Available in Solon, OH
Mortgage loans in Solon, OH are designed for all types of buyers. Some individuals may be purchasing their home for the first time, and others may be refinancing to receive a lower interest rate. When a person goes to shop for a loan, they will find two main categories: conventional loans and government-backed loans. Conventional loans can be set up so that a person pays a fixed rate or a variable rate.
Fixed rate mortgages are typically offered in time spans that equal 30 years or 15 years. When a person decides to use a 30 year fixed-rate loan, they end up paying a fixed amount for the mortgage every month for the next 30 years. Their payment will go towards both principal and interest. Their interest rate will also stay fixed for those 30 years. In contrast, a 15 year fixed-rate loan has a time span that equals 15 years. This type of home loan will have a lower interest rate, but it will also have a higher fixed payment each month. An advantage of choosing a 30 year fixed-rate loan is that it makes a mortgage more affordable due to the lower monthly payments. However, a disadvantage is that a person will carry this type of loan for twice the time of a 15 year fixed-rate loan. A person must decide which is best for their budget.
An adjustable rate mortgage (ARM) is another type of conventional loan that is chosen by some individuals. It is easiest to show how this type of loan works with an example. A 3/1 ARM is a popular adjustable rate mortgage that is offered in Solon, OH. If a person chooses this option, they will pay a fixed rate for three years and pay a variable rate for the next 27 years of the loan. This option is usually a wise choice for individuals who will not be staying in a house for an extended period of time. If a person thinks that they will be living in the home for longer than five years, they may want to consider a fixed-rate loan as interest rates could continue to rise year after year. They would be stuck with higher mortgage payments if they initially chose an ARM.
FHA Mortgages in Solon, OH
Fixed and adjustable-rate mortgages are not the only option that a person needs to consider when choosing a loan. He will need to decide if he wants a government-backed loan or a conventional loan. The loans insures by the federal government include an FHA loan, VA loan, or USDA loan. The Federal Housing Administration insures FHA loans. They are ideal for first-time homebuyers; however, anyone in Solon, OH can apply for a loan. To be approved for this loan, individuals do not need perfect credit, and they only need a 3.5% down payment. The Department of Urban Development (HUD) manages FHA loans. The downside to these loans is that borrowers must pay for mortgage insurance which will increase the monthly payment amount. The Veterans Affairs insured VA loans to anyone who has served in the United States military. With these loans, the VA backs 100% of the loan, so no down payment is needed. The US Department of Agriculture insures USDA loans to people who live in certain rural areas and make a lower income. A conventional loan is not insured by the federal government. A higher down payment is needed, and individuals need good credit.
Refinancing Home Loans in Solon, OH
If people want to get a lower interest rate, lower their monthly payment amount, or shorten the life of their mortgage, they might choose to refinance their loan. Some people refinance to switch from an adjustable-rate loan to a fixed-rate loan. When refinancing, individuals will be getting a completely new loan. The old loan will be paid, and a new one will be created. Therefore, borrowers will still need to pay closing costs and other fees. People need to decide if refinancing their loan is worth the fees. Are they really saving money? If a borrower is switching from an adjustable-rate mortgage to a fixed-rate mortgage, he is likely to save money, so it is probably a good option. Rates are likely to increase rather than decrease. To get the best rate, borrowers need to keep their credit score above 700 and their debt-to-income ratio as low as possible. Even if a person’s credit score is not great, he can still get a home loan in Solon, OH with a low rate. Buying a new home does not have to be a stressful experience. People should let Wirefly do the work for them. Wirefly can compare rates and give borrowers the information to get the lowest rate available.
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