Overcoming high interest rates: Getting your homeownership goals back on track
Whether personal, career or financial — so often goals get put on hold. Sometimes that’s unavoidable, other times it’s a matter of finding an alternative path to success. If your plan to purchase a new home has been stalled due to current market conditions, there are options that may bring your next big move back into sight. No one can say what’s next or predict where rates and the housing market will go. What matters most is to focus on when you’re ready to buy.
Three options to consider to get your homeownership goals back on track are adjustable-rate mortgage (ARM), FHA and VA loans. Read on to discover how each provides different benefits that may fit your current needs.
Before you dive in, keep two things in mind:
1. Adjustable-rate mortgage (ARM) loan
ARM loans typically feature lower rates and monthly payments than comparable fixed-rate loans during the initial rate period, but rates could increase or decrease once the initial rate expires. While many homebuyers prefer the security of a fixed-rate mortgage, an ARM can be a good choice, too. With longer initial fixed terms (5, 7, 10 years) on a 30-year loan, U.S. Bank has modernized this option to help fit more buyers’ needs.
2. Federal Housing Administration (FHA) loan
Commonly known as a great option for first-time buyers, an FHA loan could also be right for repeat buyers, too. This option is government-backed and offers more flexible lending requirements than conventional loans. That paves a pathway to success for buyers with a credit score below conventional loan requirements or who have limited cash for a down payment. While the interest rate may be somewhat higher than that of a conventional mortgage and mortgage insurance is required, the affordable down payment as low as 3.5 percent can be a worthwhile trade-off.
3. VA home loan
A VA loan can help active service members, veterans, and eligible surviving spouses reach their homeownership goals. This option is backed by the Department of Veterans Affairs (VA) and requires little or no down payment. Even with no down payment, VA loans do not require mortgage insurance which results in an overall lower monthly payment.
As an approved lender for the VA Home Loan Guarantee Program, U.S. Bank can offer eligible buyers favorable terms on all types of home mortgage products.
Ready to get your homeownership goals back on track?
If you’re ready to buy, don’t let the daily details of the market distract you. Keep in mind that an affordable monthly payment is still possible. We’re here to help! Discussing the above options and other factors with a trusted mortgage loan officer is a great way to firm up your plan and fast track your vision to becoming reality. Find a local mortgage loan officer to discuss your situation over the phone, via email or within a branch.
Visit our first-time homebuyer’s guide to learn more about the mortgage process its steps.