by Paul Oranika

Created on: November 20, 2009

There are many home ownership programs available to anyone interested in buying a house. Fixed-rate mortgages and adjustable-rate mortgages are among the more popular programs. Others includes home equity loans and FHA loans. These home ownership options must be weighed carefully against the home-buyers needs along with their financial circumstance.

Fixed-Rate Mortgages

Fixed-rate mortgages allow home buyers to choose the time frame over which they want their loan financed. They may choose 10-year, 15-year, 20-year, 30-year or 40-year mortgage loan periods. Some programs offer 50-year programs. The main principle behind a fixed-rate mortgage program is that the interest rate remains the same for the duration of the loan payment.

FHA Loans

Federal Housing Administration loans are federal sponsored home ownership program with mortgage insurance which is also funded as part of the loan. This kind of mortgage loan is ideal for first-time home buyers. One reason is the limited down payment requirement. The FHA loan program was established in 1934 during the Great Depression. The FHA insures the loans but does not provide funding.

VA Mortgage Loans

The VA home mortgage loan program, is a government sponsored loan program reserved for veterans. The VA program is also available to spouses of deceased veterans. Specific conditions apply to the loans, including the number of years of service, and method of discharge. Other conditions taken into consideration is whether the veteran received honourable or dishonourable discharge. The VA loan is guaranteed by the U.S. Department of Veteran Affairs, but funding comes from conventional banks.

Adjustable-rate Mortgages

The adjustable loan program uses variable interest rate criteria for loan finance purposes. Adjustable-rate mortgages carry interest rates that can be adjusted over time in line with fluctuating interest rate levels. The adjustable rate mortgage program is a tricky situation. At the time of the loan finance the home buyer may not fully understand that the monthly payment amount for the loan is not fixed. When interest rates are low, the adjustable mortgage program may look attractive. The situation changes when interest rates go up. The home buyer may be required to pay more in monthly payments to reflect the new interest rate increases.

Equity Mortgage Loans

Equity Mortgage Loans apply different mortgage loan strategies, it may be adjustable or fixed with an established equity line of credit from which the home buyer may draw some money if need be. Home equity loans may be used to pay for home improvements, they have some advantages. They come with tax-deductible interest rates, For instance a home equity borrower may take some tax deductible loans to pay for college education for a child through this program.

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