A home should be a place where you can feel safe and secure. This space that you live in is nothing more than just a large room or an open area with surroundings that take up a lot of space. There is no such thing as the perfect singular home for people. A house that you might be currently living in may not be considered home to you, especially if it does not make you feel like this is a place where you truly belong.

That same predicament plagues thousands of people, including you. You do not merely purchase an apartment or house that you know has glaring issues that you cannot fix. Sure, you can easily buff out some scratches and fix up some dings around your potential new house. However, there are a lot of limitations over what you can fix and what you cannot. Situations such as rowdy neighbors and poor neighborhood security are enough to cause significant doubt to a potential homeowner’s decision.

Unfortunately, owning a property and turning it into a home is not something you might call easy. Instead, there is a lot of planning and financing to find the best one to fit you and your family. These factors would generally have you paying a cost higher than you would be initially willing to pay. That high spike in price is something that you will have to consider for better living conditions. As such, you cannot put a price on your family’s safety. That reason is why you should consider checking out the best types of mortgage loans that you can apply for to get your dream home.

Fixed-Rate Mortgages

For first time home buyers, getting a mortgage loan is always such a nerve-wracking ordeal. You would need to account for any money you loan from the home mortgage loan companies that will need to be paid in the allotted time. Failure to pay for your debts would result in severe consequences or a hefty additional penalty fine that can raise your debt to impossible levels. This massive upsurge in pricing could potentially lead you to mismanage your total debt owed sum.

The best option to help you make a concrete plan to pay for your home mortgage loans is to have it all out in the open. That process can be done when you apply for a fixed-rate mortgage. As the name suggests, this type of mortgage would allow you to have a singular payment price and scheme for the duration of the entire debit payment period. This type of mortgage would mean that you would never have to worry about the cost of inflation that could increase your total amount of debt owed. Instead, you only pay what was previously agreed upon entirely.

Although, you do need to be aware that a fixed mortgage-loan does come with its own set of drawbacks. One of the flaws, as mentioned earlier, would be the fact that you would generally pay more in interest than any other type of home mortgage loan out there. Not only that, but the loan companies would take into account that prices could very well increase throughout your payment period. That knowledge would lead to them charging you for a higher amount than what is regular at the current market rate.

Adjustable-Rate Mortgage

This form of mortgage is somehow the opposite of a fixed-rate mortgage option. With this type of mortgage, you will be left with a fluctuating mortgage that could very well work in your favor or against you. Although, you do have a standard ARM fixed-rate period, typically for five years, where the rate of your mortgage would stay stagnant. Only after those fixed-rate years would your mortgage interest rate start to fluctuate on an annual or monthly basis.

This type of mortgage has a small initial interest rate compared to others for your first few years. You can also use this lower fixed interest rate to invest and save up more money until your mortgage starts to change back into an adjustable-rate. Home mortgage loan companies can use this time to set you back as soon as the fixed-rate is over, however. There are also rare cases wherein the adjusted rate would become too steep that it becomes unpayable, resulting in a loan default for the client.

Government-Approved Mortgages

The United States Government understands that every person has the right to a good home. This understanding is why you can apply for multiple government-issued or government-approved mortgages that can help finance your home. These different types of mortgage loans are supplied under three various government agencies.

The Federal Housing Administration, referred to as FHA, is perfect for those who do not have the necessary capital to pay down payments. This mortgage type requires its clients to have a minimum FICO score of around 500 is generally enough to receive a form of a mortgage from the FHA. Do note that your FICO score is crucial as it directly correlates to the amount of payment you would need to pay in advance (down payment). You need to finance two insurance premiums paid upfront for one, and the other would need to be paid annually for those who did not pay the 10% initial downpayment.

A Department of Veteran Affairs mortgage loans are only reserved for those employed in the U.S. Military. However, this would also apply to those that are currently serving and retired veterans. This type of mortgage loan would not require the borrower to pay for any downpayment or PMI. The only payment added to this mortgage would be the funding fee charged as a percentage of the loan itself. This fee is done to help the taxpayer’s offset the cost of this mortgage program. Your mortgage loan would still need to be paid. The funding fee can also be brought as an additional upfront payment at closing.