Types Of Christian Home Loan
The types of Christian home loans available today provide a great deal of options for homebuyers, but the most popular include conventional mortgages, adjustable rate mortgages, and buy down mortgages. Out of these three, as the name suggests, a conventional mortgage is the home loan that most homebuyers choose, because the terms and rates are more set than most other choices. Other financial agreements exist, but these options are the most sought after.
The first, the conventional mortgage, allows the homebuyer to make many choices. First, they can choose how long they have to pay back the borrowed amount. The three most common choices for these types of home loan are 15, 20, or 30 years. Also, the interest rate is established at the beginning as a fixed percentage with no change over the term of contract. Other mortgage agreements usually allow for fluctuation in interest rates and terms of repayment. This well used method is the adjustable rate mortgage. With this type of mortgage, the homebuyer receives many of the same features as the conventional mortgage. The major difference is, as the name suggests, the adjustable interest rate. Many types of home loans provide a set interest rate, but the adjustable rate mortgage allows the interest rate to change, usually every year. There is typically a cap or maximum interest rate set in the contract so the rate will never exceed the maximum agreed upon rate.
The final type of financing used, and one of the least known method, is a buy-down mortgage, which provides a very different approach to mortgage financing for the homebuyer. This agreement allows the homebuyer to repay the interest at the beginning of the term of payoff. With the interest being paid off early, the payments will be much lower for the homebuyer. Of all the types of home loan options, the buy-down mortgage is the most risky, since the premium on the house is not being paid for and equity is not being built.
For anyone looking toward purchasing a home, there are many options to choose from. Therefore, it is important for the potential homebuyer to explore their options and the types of home loans available from any lender they choose to deal with in order to gain understanding and knowledge on the subject, and to assure they can negotiate the best deal. There are many websites and agencies that will provide this information. By seeking information on the various types of home loan availability, consumers will be much more equipped for making wise home purchases in the future. Use spiritual wisdom too, to assure God's blessing on the search: "Seek ye first the kingdom of God and his righteousness; and all these things shall be added unto you" (Matthew 6:33).
Executive home loan rates are at 30-year lows, making this the ideal time to purchase or build a house. This type of lending has become very competitive today because so many consumers are taking advantage of the low interest rates. Purchasing, building, and refinancing have continued to expand in recent years, prompting the creation of a wide variety of executive home loans. This is good news for the credit-challenged borrower. Research has shown that mortgage companies often work harder to get the borrower's approval for an expensive house than a loan officer at a bank does. However, if the borrower has a standing relationship with a bank loan officer, he should not rule that out that option when applying for financial contracts.
Executive home loans are tailored to fit the circumstances of many consumers who have credit issues. Many borrowers have extensive credit problems when they initially apply for funds. As a result, they have to pay a higher interest rate. At this point, an adjustable mortgage might be considered to obtain a lower rate. This will allow those with credit problems a little room to repair their credit. When the term of the adjustable rate mortgage expires, the borrower's credit scores will likely have increased, allowing him to receive a lower fixed interest rate.
Home-buyers can begin looking for an executive home loan with local lenders that he knows and trusts. Buyers can also search the Internet to find the right deal. Countless numbers of web sites advertise these types of contracts. The lenders often give instant approval online, but the approval process can be quite lengthy. There are many web sites that will enable consumers to request information about executive home loans. Once a request is submitted, the information may be distributed to a number of executive home loan institutions that will end up competing for his business.
Many commercials advertise the fact that institutions will compete for a buyer's dollar. But the wise shopper will take his time to make sure they are offering him the best deal. Hidden costs or other fees will often prevail as an applicant gets closer to the closing date of the financial contract. The personal element of talking to someone about executive home loans face to face is lost when dealing with Internet lending institutions. An advantage of applying online is that the applicant doesn't have to go from place to place, looking for the best deal. He can easily compare terms and payback plans from several different companies. We must also keep in mind that possessions are not our first priority; God and people are. Proverbs 23:23 says, "Buy truth and sell it not." Nothing we can do will ever make up for avoiding truth and acting rashly.
Home Building Christian LoanHome building loans represent a different approach to financing. These are designed to provide the money needed to pay for the house as it is being built. It is not meant to be used as a mortgage loan over the time lived in the structure after it is built. Once it is built, a mortgage will need to be secured in order to pay off the building loan. There are other considerations that need to be thought about while thinking about the construction of a residence.
Each stage of construction requires a lump sum to be paid to the builder in order to fund the next stage. A home building loan is designed to pay for the house as it is being built. This is accomplished in stages, usually distinguished by a 'percentage of completion' number. It is required that the lender be able to pay lump sums based on the stage that has been completed. The builder must be able to prove that a stage has been completed before the provider will release funds for the next stage. "Every house is built by someone, but God is the builder of everything." (Hebrews 3:4}
In order to qualify for this, information about who is doing the construction, and how the building is being done will be needed. Funds are only released when the lender is satisfied that the builder is competent, that the design is appropriate, and that the eventual owner is able to pay for it once built. Working with established builders, building within a subdivision that is being developed in partnership with accepted builders, and working with finance providers who specialize in home building loans are all good strategies for successfully getting a home building loan. The more marketable the design and the more popular the location, the greater the chance that the money will be approved.
Finally, because home building loans are not permanent mortgages, determining how to finance the home once the construction is complete will be need to be done. There are a number of approaches people use to convert home building loans to permanent ones. A conventional route would be to shop for a permanent mortgage at various banks, finding the best rate and terms available. The mortgage lender will need to know that the home is currently being built and that there's a wish to convert to a permanent mortgage upon completion of construction. Another approach to is to secure a double loan, which is a home building loan that automatically converts to a permanent one once construction is complete. This saves time and the dollars associated with closing two separate deals. If the home is being built as an investment, consideration of converting to an ARM (adjustable rate mortgage) may be a better solution..
Home construction loans are designed to allow a borrower to build their own residence from the ground up. Mortgage companies offer two types of financing. Lenders may draw up an initial home construction loan at the beginning of the building process and then make a permanent one at completion. The borrower may have to re-qualify for the permanent loan and obtain an additional appraisal on the property. The interest rate could change if it isn't locked in or guaranteed on the initial agreement for the loan.
The second way that a lender makes home construction loans is by making a combination loan that becomes permanent upon completion of building. With this type of financing there is just one set of closing costs, no re-qualifying and up to 12 months to complete building. Some lenders will do either type of financing. At the beginning of the building process pray and ask God to bless it and to bless everyone that is associated with it. "And it came to pass from the time that he had made him overseer in his house, and over all that he had, that the LORD blessed the Egyptian's house for Joseph's sake; and the blessing of the LORD was upon all that he had in the house, and in the field" (Genesis 39:5).
Some mortgage companies try to make applying for home construction loans as simple and easy as possible. They understand that it is a big commitment for borrowers. Although, not too difficult, a home construction loan, like any other financing, requires research and preparation. Ask questions about the required down payment and total payoff amount. Ask the lender about other fees and closing costs, terms and the required monthly payment amount. Do not sign the contract if the monthly payment amount is more than is affordable. Pray about finding the best builder and financing when researching a home construction loan.
There are many decisions that have to be made when building a home. Consider how many bedrooms and bathrooms are needed. There may be some choices regarding the placement of rooms. What about the size of the living area and dining room? Some homes have a formal dining room for special occasions and family get-togethers. Christian home construction loans offer many choices on tile, carpet, paint, bathroom and kitchen fixtures, and much more. It is fun to look at color swatches and decide on details. To be a part of such a thrilling time is a once in a lifetime experience that everyone should take part in.