Home Buying & Refinancing: A Brief Guide for Investors

Are you someone who is planning to buy a home? There is no denying the fact that buying a home is a big deal whether you are planning for your next one or are a first-time buyer. Once you get started with the process, unexpected complexities become apparent. Also, with so many risk factors that come along, you may not be able to pay the upcoming installments. In that case, people start searching for refinancing options but without any technical awareness which type of home loan or refinancing model will suit best as per their need is a tricky question. Therefore, this first time home buyers guide has explained the different home loan and refinancing options available. So let us get started without any further ado.


Types of loan options available for home buying


Whether you are planning to purchase a home for the first time or have done the same before, you will agree to the fact that you cannot buy a property with complete cash. Apart from this, there are some buyers who do not have sufficient funds with them. Regardless of the reason, know that the lenders take pride in providing different types of loan options. All of these loan options come with their own terms and conditions. Henceforth, the next time you are planning a residential property, check out the loan options available and see which one is the best suited for you. Some of the loan options are mentioned below. Take a look.

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  • Speciality Home Loan: This home loan allows the potential buyer to purchase a home up to $1.5M. The down payment that should be paid by the buyer is five percent. In addition to this, the loan repayment period can be easily extended to the next forty years. Nevertheless, the first ten will be interest only payments.

  • Jumbo Loan: A Jumbo loan is designed by the experts for buyers who want to purchase high end and costly residential properties that exceed the loan limits of a conventional loan. The loan limit for one specific buyer is set every single year by the professionals of the Federal Housing Finance Agency. This limit is somewhere around $647,200. If a buyer exceeds this amount, it clearly means that they have entered the jumbo mortgage industry.

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  • Adjustable Rate Mortgage: This is a home loan option that comes with a rate of interest that can be adjusted as time passes. Basically, the loan option begins with a lower rate of interest as compared to other traditional loans. Therefore, this is one primary reason why adjustable rate mortgages are one of the greatest options if you are someone who wishes to have the lowest rate of interest and other costs.


The list of home loan options is huge. Therefore, in order to select the best one, you can always keep in mind your financial requirements, and then make an informed decision. Apart from this, if you already have an existing home loan and you are unable to make the installments on time, consider opting for mortgage refinancing.


Mortgage refinancing


Mortgage refinancing is a procedure that can be opted by buyers who are not happy with their existing rate of interest, installments, and other costs. If you are someone who wants to switch to a new home loan that comes with loan interest rates, improved repayment period, and other benefits, refinancing is the right procedure for you. However, before you get started make sure to use a mortgage loan calculator. The calculator will give you an estimate of how much you might end up spending after obtaining the new loan.


The Ending Words


Purchasing a home loan is not difficult if you end up selecting a suitable loan option. Therefore, make it a priority to select a suitable loan and then get started. Also, if you have an existing loan and you are unable to make monthly payments on time, mortgage refinancing is a procedure you can always consider.

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