Mortgages make homeownership possible. There are a few programs available to help a person become a homeowner. There are various mortgages available, but in most cases, a person must meet certain criteria. The criteria will depend on the type of mortgage to be used. In the United States, there is nearly 64 percent of a homeowner who has a mortgage. In 2018, there was over $25 trillion in real estate owned by individuals, and there are over $10 trillion in mortgages as of 2018. The government has few programs will offer loans for homeownership.
Advantages of Government programs Used for Home Ownership
There are plenty of mortgage loan programs plano tx available to purchase homes. The Federal Housing Administration (FHA) provides programs to individuals who do not have a great credit score to receive a loan to purchase a home. FHA would normally require a down payment of 3.5 percent. The down payment allowed by FHA is well-below what a borrower would need if they purchase the home with a loan from the FHA. The Veteran Administration (VA) is another government agency who makes it easier for former military personnel to obtain a loan to purchase a home. The VA has a program that would not require the military veteran to use a down payment nor any mortgage insurance will have to pay. Those are a few benefits that the government agencies provide, but there are other benefits such as:
- Makes It easier to obtain a loan
- Improves the economy
- flexible repayment program
Most government agencies have programs to make receiving a loan a lot easier. The criteria are not too strict, and it helps people who ordinarily may have not been capable of acquiring a loan under different programs. By offering loans, government agencies will create activity, and activity will help improve the economy. A government agency will be able to offer better repayment terms than a private lender.
The Various Types of Loan Programs
There are several programs used to make homeownership possible. Fannie Mae or Freddie Mac loans can be utilized for first time home buyers. The program normally requires 3 percent down payment. It can be helpful to anyone who has a good credit score, but lack funds to pay a large down payment. There is a Native American Direct loan backed by VA. The criteria to be eligible for the loan is a person must be a Native American military veteran. The loan can be used for renovations and building homes on federal trust land. There are loan programs that utilize fixed-rate mortgages. The greatest advantage provided by a fix-rated mortgage allows the borrower to have a mortgage with an interest rate that will stay the same throughout the term of the loan. The ideal user of the type of mortgage would be a person who plans to stay in the home purchased by the loan for at 7 to 10 years. There are programs that will offer the adjustable-rate mortgage (ARM) to purchase a home. The interest rate of the mortgage will change throughout the term of the loan. The mortgage will allow low-interest rates at the beginning of a mortgage. A person would save money on interest paid when using the ARM.