You are probably already aware that mortgages come in all amounts, interest rates, and life terms, but what about special mortgages for specific cases? Lending companies have tailored many mortgages to suit people and businesses from all walks of life in order for them to get just what they need. Even the average person may qualify for something special depending upon his or her lifestyle or past.
VA Loan A VA loan is a mortgage made just for members of the military. VA stands for Veteran’s Administration, and because being in the military can be hard on family and also mean some financial difficulty, a VA loan allows for no money to be put down when the mortgage is initially applied for as most people typically do when purchasing a home. If you like, you can put down a small amount of money, but qualifying for a VA loan means you do not have to. Most lenders offer VA loans, and if the first one you visit does not, keep cool and simply look for another.
There is a list of eligibility requirements, but a quick visit to the Veteran’s Administration webpage will tell you all you need to know. There are some cases in which you do not need to be military personnel, and instead be related or married to a person who is currently on active duty or who has died in the line of duty. You will need to bring a Certificate of Eligibility to your lender in order to receive the mortgage.
Two-step Mortgage A lot of people have never heard of a two-step mortgage. Essentially, it comes in two parts; the first part of the mortgage allows you a rate that is usually below the market rate. After a fixed number of years, a new rate you and your lender have agreed upon will go into effect, replacing the old rate. This new rate can either be fixed or adjustable, depending upon what you want to get out of your mortgage. Those who seek two-step mortgages should plan on staying in their home for a long time. Typically two-step mortgages come in two combinations (there are others but these are the most popular). The first is 5/25 in which the first 5 years you pay the low, fixed rate and the remaining 25 you pay the second agreed upon interest rate. The second is 7/23, and works in the same manner.
Wraparound Mortgage If you plan on making a large property purchase and not just the usual home purchase, you may be more interested in wraparound mortgage. This can be especially true for the future business operator looking to build a new office or other development. A wraparound mortgage begins with the seller of the property. This seller may still be working off a mortgage on that property, so when you make the purchase, you will now pay the remaining mortgage amount, as well as payments to the seller for the purchase of the property, which will likely be the mortgage you receive to buy it. These two mortgages are combined and you make payments that have a balanced interest between the two. Through this, you are buying the property and repaying your mortgage at a similar time, as part of the payments you make will be forwarded from your lender to the seller.
