Obtaining Mortgages in Hanover

For many people, mortgages are a necessity before home ownership can be possible. Fortunately, individuals interested in purchasing one of the many homes for sale Hanover have several options when it comes to obtaining a mortgage.

Types of Mortgages

Some of the most common mortgage options include:

Conventional Mortgage

A conventional mortgages Hanover is one of the most popular types of mortgages available. Most lenders that offer conventional mortgages require them to comply with Fannie Mae or Freddie Mac guidelines. These organizations impose requirements with regard to buyer's credit scores, minimum downpayment, maximum borrowing amount and more. In order to qualify for a conventional mortgage, borrowers must also have enough income to cover their mortgage and other revolving obligations. Ideally, borrowers should be able to make a downpayment equal to 20 percent of the home's purchase price. However, smaller downpayments may be approved if the buyer agrees to pay mortgage insurance.

FHA Mortgage

An FHA mortgage is a mortgage insured by the Federal Housing Administration. This type of mortgage is easier to obtain, as the credit score, income and downpayment requirements are not as strict as those imposed on conventional loan borrowers. However, FHA mortgages typically require borrowers to pay FHA mortgage insurance regardless of how much money they are able to put down on the loan.

VA Loan

VA loans are guaranteed by the United States Department of Veterans Affairs. They are provided by private lenders, but are available only to qualifying service members. These loans require little to no downpayment, making them a viable option for buyers who don't have much money to put down on the purchase of a new home.

Mortgage Terms

In addition to selecting the type of mortgage that is most appropriate, buyers must also determine the terms of the mortgage they will obtain. Examples of terms that must be considered include:

Mortgage Length

Mortgages vary in length, with 15 years and 30 years being the most common lengths chosen. Although 15-year mortgages allow the homeowner to pay their debt faster, they require a higher monthly payment than 30-year agreements.

Interest Rates

Interest rates may be fixed or variable. While fixed interest rates remain the same over the life of the loan, variable interest rates may change.

Downpayment

The downpayment is the amount of money put down on the mortgage when it is initiated. The higher this amount, the lower the mortgage payment will be. Higher downpayments may also help to lower the interest rate.