9 Ways to Finance Your Dream Home

Close up of pen contract calculator on the table agent and couple in the background

Owning a home is the American Dream – go for it! Whether your dream is a first home, bigger home, vacation home or a place in the country, the first step is choosing the right home mortgage to meet your needs. Consider one of these options:

1. Fixed-Rate Mortgage Loan: These traditional loans offer stable monthly payments and a set interest rate. A fixed-rate mortgage is a good choice for homebuyers who plan to stay in their home for a long time, and for those who want stability in their budget.

2. Construction Loan: Building your dream home? A construction loan covers the costs of planning, designing and building. Once you finish construction, you can convert to a more traditional mortgage to repay the loan. Since construction loans carry a higher risk to the lender, they tend to have higher interest rates calculated during the construction period and may require larger down payments than traditional mortgages.

3. Adjustable Rate Mortgage (ARM): If you need a lower interest rate and lower monthly payments at the start of your loan, an ARM loan may be the way to go. Be aware, though, that after the initial fixed-rate period ends, the interest rate — and your payments — could change annually for the rest of the loan period, based on market conditions and the interest rate index tied to your loan.

4. Home Equity Line of Credit: Your current home can be a great source of cash! Borrow against your home’s value and receive a lower interest rate than you typically see with other types of loans. Lines of credit operate much like a credit card — with your home as collateral — commanding variable interest rates. You can control how much you borrow, up to a predetermined limit, and use the cash for consolidating other debt, remodeling and more.

5. Home Equity Loan: More stable than a line of credit, home equity loans offer low rates and predictable payment plans, perfect for those who don’t like surprises. Turn the equity you have in your home into cash for home improvements, consolidating debt, buying a vehicle, vacation expenses or education costs.

6. Federal Housing Administration Loan: FHA loans are a great choice for first-time homebuyers or those with less-than-perfect credit. The federally insured program comes with a good, low down payment requirement of 3.5%, and you can include closing costs and fees in the loan amount.

7. Veterans Administration Loan: Former or active military? You might qualify for 100% financing and no mortgage insurance requirement. VA loans are available exclusively to military veterans and are backed by the federal government. Even better, first-time homebuyers who qualify for VA loans through Landmark Bank may be eligible to receive a $700 credit toward closing costs, too.

8. U.S. Department of Agriculture Loan: Looking to trade city life for wide-open spaces? USDA loans offer some of the lowest fixed interest rates available for those financing a home in a rural area. You could qualify for up to 100% financing as well.

Your local banker can help you decide which mortgage option is best for you, plus may offer additional options. For example, Landmark Bank’s Home Possible® Mortgage is designed for first-time homebuyers and low- and moderate-income borrowers. This fixed-rate mortgage requires a low down payment of 3%, which gets you into a home with less money upfront. Balance this off with an expected higher interest rate or a mortgage insurance requirement.
 
Learn more about Landmark Bank’s mortgage offerings at https://www.landmarkbank.com/personal-banking/home-lending/mortgages.
 
Explore other helpful blogs at https://www.landmarkbank.com/about/our-story/blogs.
 
 

Back to Blog