If you are shopping for a home, you will also want to shop around for the right home mortgage to fit your needs.

The Lawhead Team would like share some common home loans and why they are beneficial. If you have any questions about applying for a home mortgage, please call us and we would be happy to help steer you in the right direction.

• 30 Year Fixed – These are mortgages where interest and mortgage payments remain the same for 30 years, at which time you will have paid back the entire loan. This is good for those who prefer the security of fixed-monthly payments like fixed-monthly mortgages. Often, this mortgage is more expensive than its adjustable-rate counterparts, but is easier to understand and provide the greatest payment stability. If you can afford this loan and plan to be live in your home for 10 or more years, this may be the best option for you.
• 15 Year Fixed – These are mortgages where interest and mortgage payments remain the same for 15 years, at which time you will have paid back the entire loan. These loans offer the lowest fixed rates but have the highest monthly payments because you are paying off the loan in a shorter timeframe. This is good for those who prefer the security of fixed-monthly payments and can afford the higher monthly payments of a 15-year term like this mortgage. You will build equity quickly, but the high monthly payments may restrict the overall price of the home you can afford.
• ARMs – Adjustable-rate mortgages (ARMs) are mortgages where the interest rate you pay adjusts at a specified time and frequency. There are many different ARM products, but generally they offer a lower initial rate than a 30-year fixed and they adjust with market trends. Therefore, when your initial rate period ends and your ARM is ready to adjust you may be paying more (with higher current market trends) or less (with lower current market trends) than your initial rate. Generally, ARMs follow this pattern: the shorter the initial term, the lower the initial rate.
• Interest Only – These are fixed or adjustable rate mortgages where you the option of paying interest only for a specified term, usually five to ten years. After the initial term the mortgage switches to a fully-amortizing mortgage for the remainder of the loan. This is good for people who expect their financial situation to change in the near future. Young professionals like doctors and lawyers may also prefer this mortgage since they believe they will be making significantly more money in the future than they do now.
• Payment Option “flex pay” – These are mortgages where you have the option of paying different amounts each month. Usually, the monthly payment options include a low payment option, an interest-only option and an interest plus principal option. The low payment option creates negative amortization and usually adjusts yearly with a maximum rate cap. This is good for people that do not have steady incomes may like this loan. It provides the most flexibility from month to month.

If you have faced foreclosure in the past, looking into buying a new home might be a bit trickier than for others.  The Lawhead Team would like to share some helpful tips to buying a home after you have faced foreclosure.

Many of us have experienced some form of financial hardship over the last few years such as losing our job, taking a pay cut, or a decline in the value of our investment and retirement portfolios. Many more people than some of us realize have also experienced extreme financial hardships because we have been forced to lose our homes, resulting in a foreclosure.

Losing your home can be devastating both personally and financially, but what’s important is that we do what we have to do to clean up our past and then we move into our future with hopes of making it better. One of the biggest questions that people ask when they lose their home is how long they have to wait to apply for another mortgage loan after declaring bankruptcy, foreclosing on a previous home, or having a short sale on your home.

What you need to know before you apply for a mortgage loan – There can be a lot of confusion surrounding when you can apply for a mortgage loan after a bankruptcy, foreclosure or a short sale.

Applying for a mortgage loan and being approved for a mortgage loan are two different things.  Just because you are able to apply for a mortgage loan doesn’t necessarily mean that you will automatically be approved.  Being approved for a mortgage loan depends on many factors such as your personal income, the amount of your savings, as well as your ability to repay the new mortgage loan. You have to take the necessary steps towards improving your personal finances, and being informed on the process of applying for a new mortgage loan after a bankruptcy, short sale, or foreclosure is a great first step.

Applying for a Mortgage Loan After a Bankruptcy – If you filed a Chapter 7 Bankruptcy you will have to wait 4 years from the discharge date if you are applying for a conventional mortgage or for a mortgage with Fannie Mae. However if you have filed several Chapter 7 Bankruptcies in the past 7 years you will have to wait at least 5 years to apply for a new mortgage loan.  If you file a Chapter 7 Bankruptcy and you are applying for a mortgage loan with FHA you must wait at least 2 years from the discharge date.

If you Foreclosed on your previous home you will have to wait 5 years before applying for a new conventional mortgage loan.  You will have to wait for 7 years before applying for a new mortgage loan with Fannie Mae and 3 years from the completion date of your foreclosure if you are applying for a new mortgage loan through FHA.

If you have to wait five years after financial hardships before you can apply for another mortgage loan then you have five years to get your finances in order.

Of course if you have any home buying questions what so ever, it is important to call The Lawhead Team.  They can find the answer for you or direct you in the best way suited for your situation.