Most seasoned homeowners have already gone through the process of applying for and using a home loan to buy their first house. With little money down and PMI insurance, the home loan options may have been fewer than if you own a home already.
When you are ready to move from your current home, one reason you will have more loan options is that you will probably be able to put down a larger down payment on your next house. This might be enough to eliminate mortgage insurance (PMI) as well, and you may also get a lower rate on a new mortgage loan so the loan choices available can be more appealing.
Let’s talk about some of those home loan options that are available for current homeowners.
What Type of Mortgage is Best for Current Homeowner?
Conventional 30-Year Fixed-Rate Mortgage
The Conventional 30-Year Fixed-Rate Mortgage is the most popular type of home mortgage in the US. It offers a fixed rate for the entire length of the loan. Some loans can offer a lower interest rate and you can eliminate the PMI with 20% down or more. Fixed-Rate Loans like this also offer no prepayment penalty if you’d like to pay the loan off before the end of the mortgage period. There is a reason these tend to be the most favored to buy a new home with.
Jumbo Home Loans
The Jumbo Loan could be just the right option for your new home. They can be more time consuming to apply for, but if you are looking at homes in the upper $400’s and above, this might be a great loan for your new home purchase. The maximum loan amounts will vary between lenders. These loans are available if you are buying a primary residence, a second home, or an investment property. These are considered a type of unconventional loan.
USDA Loans
If you are considering moving to a home in a rural area, this type of US Department of Agriculture loan might be perfect for you. Even if you own a home already, you might be in a low-income situation with a smaller budget. You can still move to a fantastic new home with the USDA loan backed by the US government.
VA Loans
The VA Loan isn’t just for first-time homebuyers. If you are a Veteran who is selling your current home and buying a new house, a VA loan offers easier options to qualify and lower down payments than a conventional loan option. You can see more details for this type of loan here at the US Government website.
Unconventional Loans
You might not have heard of this option before. It’s a term that hasn’t been used as much after the financial issues in the mid to late-2000’s. However, it has been revitalized and is making a comeback. Unconventional Loans can be a good option for a variety of different types of home buyers: higher-priced homes, lower credit scores, self-employed homebuyers, and homebuyers with high debt-to-income ratios. The Jumbo loan above is considered an unconventional type of home loan.
Refinance your Current Home Loan
Maybe you want to stay in your current home, but want some adjustments in your current loan option. Refinancing into a new type of loan might be just the right option. You can refinance to receive a lower interest rate. Refinancing also offers you the option to get out of an adjustable-rate loan and move into something more stable and fixed as we talked about above.
Your New Home
This is a good overview of a variety of different home loans that might appeal to you when you are looking for your next home. Your loan advisor will be able to review these options with your more in-depth and give you guidance with the directions you can go in.
After you have reviewed your options and locked in your prequalifying loan paperwork, that’s when the fun starts…. new home shopping!
Your Local Memphis Real Estate Agent
When you are ready to sell your current home or buy a new one, look to a top-rated and experienced real estate agent, an agent that is familiar with the locations and types of properties you love in the Memphis area. Whether it’s residential or open land you’re looking for, work with a real estate professional that you can trust.
Click here to learn more about me and how I can help you with your new home purchase, buying parcels of land, or buying a house anywhere you would like to call home. My skills and education are focused on what you need for a great real estate experience. I would love to chat with you and answer any questions you might have. I can also help put you in touch with some great home mortgage groups so you can review your home buying options! Contact me at (901) 828-8919 or drop me a quick note angie@angiekelley.com. Looking forward to speaking with you today!
Angie Kelley, Crye-Leike Realtors
(901) 828-8919 or (901) 756-8900
