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Refinance:
If you got your home loan
when interest rates were higher than
they are now, you can borrow the money for your
home again at a lower interest rate
and use the money to pay off the old loan.
This is known as refinancing. |
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Debt Consolidation:
If you have many creditors
at relatively high interest rates like credit cards,
personal loans, car and boat loans, you can get
a loan on your house at today’s low rates
and use the money to pay off all the smaller bills.
You can combine everything into one loan at a lower-interest
rate and payment. As a general rule of thumb it’s
not a good idea to finance short-term purchases
(food, entertainment, vacations, non-durable goods)
with long-term debt, but if you have gotten in over
your head, the equity in your home can be a lifesaver. |
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New
Purchase Loans: If
you are buying a home select this option. Often
you can find better financing than the seller or
the realtor is offering for your purchase. |
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FHA
– VA:
Select the FHA or VA purchase or refinance options
if the loan you are looking for would be a government
insured loan through the Veteran’s Administration
or Federal Housing Administration. First time homebuyers
would want to choose this type of loan. If you want
to take advantage of the FHA or VA “streamline”
refinance program, minimal qualifying is necessary
for this type of loan. |
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Construction:
If you are building a home,
choose this loan type. Lenders that specialize
in this loan type can lend you the money to build
on a property you already own or one you want
to buy. If you won the land already they will
lend you a percentage of the properties’
future value. If you don’t own it yet, they
will lend you a percentage of its existing value.
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