Just as no two houses in Auburn are alike, no two mortgages are alike, either. Interest rates and repayment terms are just the beginning. Purchasing a home can be one of the most exciting times in a person’s life.

Currently, we have seen a drop in Auburn mortgage rates, which normally entices many new buyers into the market for buying in the Auburn area.

However, with the lower Auburn mortgage rates, only a narrow slice of borrowers would benefit from a conventional mortgage which consists of borrowers with a high credit score. For potential buyers, another mortgage in Auburn which is very helpful is an FHA loan, which may allow for a higher debt to income ratio compared to conventional loans. Also, a FHA mortgage is softer on the credit score, since it is insured by the Federal Housing Administration, and the down payment is only 3%. This makes it appealing to a lot of first time home buyers who are just starting out. The FHA mortgage has been around for a long time, and it is now making a comeback, and the interest rate is about the same as a conventional loan.

Another type of mortgage in Auburn is a VA loan, where you have to be a veteran to quality for the loan. It is also softer on the credit score, and it is a zero down loan. It also allows for a higher debt to income ratio compared to a conventional mortgage. Also, some of the closing costs are paid by the seller as can be the same with FHA as well.

Furthermore, for certain areas in the very eastern part of Auburn in the rural area there is another type of mortgage. (There is a map that I have that shows the particular eligible area). There are income limitations on this mortgage in Auburn. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. The mortgage rates are the same as FHA and VA, plus the added cost of insuring these home loans by the Federal Government is far less than FHA and is even better than the guarantee cost to obtain a VA home loan.

Finally, for those who already are credit-worthy homeowners living in Auburn, you may want to refinance your current home if the new interest rate is lower than your current mortgage rate. Also, if your current mortgage rate in Auburn is an adjustable rate, you could refinance to a fixed rate. On the other hand, troubled homeowners who have either fallen behind on their payments, have no equity in their homes, or have lost their jobs will NOT benefit by being able to refinance nor take advantage of the lower rates. They would have to try to work out a loan modification with their current lender. (See my blog on “foreclosures”.) Or they may need to sell their home rather than have it go into foreclosure.

As you can see, there are many ways to obtain a mortgage, and many variations of the above Auburn home loans that are too detailed to discuss in this format. I have a wonderful, honest, senior loan officer who will be more than willing to help you find the loan that is right for you! We are here to help you. Just give me a call.

Tags: Home-Loans

Posted on Monday, December 15th, 2008 at 9:37 pm and is filed under Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.