The Advantages of 95 Percent Mortgages

2 Aug

First time home buyers are often uneducated about many facets of buying a home, and are not aware of different financing options and programs that may be available to them.  One recent option that is available to first time home buyers is the 95 percent mortgages. This type of mortgage, often called a Loan to Vale loan or LTV, allows new home buyers  to put down only five percent of the value of the home.  They then can finance the remaining value of the home loan.

The interest rate of a Loan to Value mortgage varies, but is often a fixed rate.  A person or couple may qualify for an even more advantageous interest rate if they are able to put down 90 percent of the value of the home.  Of course, other factors are important determiners of the interest rate as well, such as the term of the loan and the credit score of the applicants.

The 95 percent loan is most often used in places like the United Kingdom, where housing tends to be a bit more expensive than in many places in the United States.  They allow people with a steady job and a good income stream to qualify for a home, rather than having to spend a lot of time saving up money for a down payment on a home. More information

The advantages of becoming a home owner sooner rather than later are numerous.  Home ownership provides a person with a sense of stability.  A person does not worry about having to find a new home if a landlord sells a property.  Homes are also frequently the largest investment that a person has.  Buying a home allows people to start building up equity, and increasing their wealth.  Home ownership also is many times more flexible than renting.  If a person wants to decorate their house a certain way, they can do it..  If a person wants to add on or remodel a room, they can do it and it increases the value of their investment, rather than a landlord’s.  A 95 mortgage can be the first step to a person building wealth.

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