Have you found your dream home in Washington, D.C.? Are you a first-time home buyer? What is your next step in navigating the confusing aspects of obtaining a home loan in D.C.?
The standard home loan is a 30-year fixed mortgage. Another option is an adjustable rate mortgage. This can also be known as an interest-only mortgage.
Of the many D.C. home loans available, an interest-only loan has become a trendy choice. What is makes this loan so attractive? What other prospects are possible to potential DC home buyers?
– The desire for an initial, lower monthly payment
– Prefer lower payments over a shorter time period
– The possibility that if rates improve, yours could also go down, allowing lower payments
– Customers may qualify for a higher loan amount, allowing the purchase of a larger house
There are a couple of other things you need to consider:
– Payments may change over time
– Potential for higher payments, if rates increase
– Interest-only loans are only for a specified time period
– Average interest only loans typically range from 4 to 11 years, at which time the payment increases to a normal level
You can apply this option to any standard mortgage, however, be careful. You will need to pay the original mortgage payment after the interest has been paid in full. This is a favorable option to parents that are assisting their children with college payments, or a father who pays child support and has a definite end date. Planning carefully for the future will provide the best outcome for this type of loan.
There are several programs available to individuals wishing to purchase a home in Washington, D.C. Some examples are as follows:
The Homeownership Opportunity Initiative
This program was designed specifically for working families, to make home financing more readily available.
The HomeSite program
This is a unique program based upon need. It provides for the homeowner with a modest income, as well as first-time buyers.
Down payment assistance
Most Washington, D.C. home loans also have programs to assist with down payment concerns. Many people believe this is free money, however, most of the time it is not. Many of these select programs are a second mortgage that has low-interest rates or deferred payments.
Qualifying for a Grant
Grants needn’t be repaid unless you sell your home within a certain amount of time. Most grant programs contain specific income restrictions. They frequently require buyers to be at, or below, 80% of the Area Median Income to qualify.
In review, the basic list consists of the standard 30-year mortgage, adjustable rate mortgages, and interest-only mortgages. This is not an all-inclusive list. Buyers have a choice of several other programs to assist in getting the house of their dreams. Before deciding on a Washington, D.C. home loan, mortgage professionals suggest that you develop a financial plan. These experts are available to assist you with any questions you may have throughout the process.
Living in the Washington, D.C. area provides so many great opportunities and a number of things you can do. In a day you can visit the monuments and the museums in the District, enjoy the nightlife and great dining in the area, or follow one of the professional sports teams in DC, you always have something to do. Deciding to buy in the area will be a decision you will be happy with for the rest of your life.
The next time you have questions regarding this subject, you can refer back to this article as a handy guide.