New Home Mortgage Loans for Low and Middle Income Buyers Help More Families Achieve the American Dream
Buying a home is something that most people dream about. Mortgage loan terms are always changing based on the housing market. Some lenders are adjusting their terms to help lower middle-class families gain favorable terms.
The Federal Housing Administration supports multifamily loans. These loans generally have lower interest rates and flexible payment terms. They’re appealing to lower-income families. Preferred home loans are another option. These loans give homeowners control over their loan terms. For example, perhaps you would like a 15-year mortgage instead of a 30-year mortgage because you think you can pay it off faster.
Real estate analysts advise homeowners to avoid choosing a block mortgage because the property may be taken if they fall behind on their payments. AHA mortgages offer traditional loan terms with flexible interest rates. Some homeowners opt for the 3-year fixed rate that allows people to own the property within a very short amount of time.
Homeowners also have to assess whether it makes sense to fill out a quote online or over the phone. True rate mortgage helps people pre-qualify for a loan if they fill out an online application.
Lower-income applicants should feel relief regarding their chances of securing a mortgage.
UPDATED 11/18/20
When you need a mortgage, one of the smartest things that you can do is to get a 15 year mortgage. This pays off in half the time as a standard, 30-day mortgage. It allows you to get your home paid for far earlier so that you can stop paying interest. A monthly mortgage payment under a 15 year arrangement will be higher than with a 30 year mortgage. However, it saves you an enormous amount of interest over the 15 years of the contract.
Before you look at mortgage lenders for your loan, it’s a good idea to know about loan calculator as well as an ability to repay calculator. Use can use these tools to find out just how much you can borrow when your down payment, taxes and other costs are factored into the equation. If you know about home loan calculators, you can find out much of the information you need right from your computer. You may have your eye on a bigger house, but a home loan calculator will tell you whether you can afford to buy it or not. This valuable tool can help to save you time and get you thinking about your realistic home budget.
A new 15-year mortgage could help millions of Americans with low to moderate incomes afford homes after the housing bust of 2008 — and build equity twice as fast as a traditional 30-year mortgage.
The Neighborhood Assistance Corp. of America, or NACA, introduced the loan back in September with the help of fellows at the American Enterprise Institute. NACA founder and CEO Bruce Marks is a liberal housing activist known for protesting stockholder meetings, but he joined with the conservative-leaning group after learning that they shared an interest in housing programs that can help buyers build wealth quickly.
The program sets a maximum home price for buyers — in Southern California, where homes are among the priciest in the country, that rate is $400,000 for a single-family home. Getting a loan, however, can be even more affordable than the Federal Housing Administration’s loans.
The NACA loan also doesn’t require a down payment, closing costs, or fees and doesn’t require perfect credit. It also gives buyers a below-market interest rate to make buying even easier for borrowers.
Joe Hendrix, director of marketing and community engagement at Homerate Mortgage, a leading mortgage lender in the Southeast, said the program is a step in the right direction. “Anytime families and even folks who are single have the opportunity to own a home in a responsible way, that’s a big win for them, said Hendrix. “But the lender and the borrower both have a responsibility to each other, in terms of not allowing borrowers to get themselves in over their heads.”
After the recession hit in 2008, millions of Americans lost their homes due to a struggling housing market. Subprime mortgages left many families with foreclosed homes and shattered dreams.
As a result, home mortgage lenders have had to adapt in order to recover after the housing market went bust — and to regain the trust of home buyers.
Grace and Armando Ong, who arrived in the United States from the Philippines in 2004, are one of those families. They bought a home two years later for $680,000 in Pomona, CA, with a monthly payment of $4,400, only to lose it just years later.
Worse yet, the house sold for just $330,000 in a short sale in 2012.
With NACA’s new loan, the Ongs are able to afford a new home for $400,000, with a 4% down payment of just $16,000. The couple plans to pay off the loan in seven years rather than 15, having learned their lesson about mortgage loans the first time around.
Through Citibank, the Ongs’ down payment also allows them to “buy down” their interest rate to just 0.5%, far below market rates.
“The American dream is a reality,” Grace Ong said to LA Times reporters.
Fannie Mae has also introduced a new program in recent months: the My Community Mortgage, which requires only 3% down. FHA loans through the government are still available for any home buyers, requiring just 3.5% down.
Mortgages have presented people with an ideal plan of owning a home. Most of the middle- and low-class individuals do not have enough cash to purchase homes. However, this does not mean that they cannot own a home. Thanks to the 30 year conventional mortgage, such people fan comfortably own a home. A mortgage is like a loan given to individuals to individuals. Just as people make an auto loan application, they can apply for a mortgage, pay for it over the years, and in turn, own their dream home. The 2019 mortgage rate graph indicates an increase in the rates, meaning a higher number of middle- and low-class individuals are applying for mortgages. 2019 mortgage rates by month show an increase in each subsequent month. Such is an indication that mortgages have become an ideal way for people to own homes.
The 30 year fixed rate loan calculator enables an individual to plans their finances and estimate whether they could afford the mortgage. The 3 year fixed mortgage rates give people an opportunity to own a home within a short period. The mortgage is a hedge against inflation due to its fixed interest rate over the whole period. No matter the economic changes, the rates will not change.
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