3 loan types most homeowners use
Call any mortgage broker and they likely will ask you a few questions to determine what loan best fits your needs. Are you a first-time homebuyer? How much will you have for a down payment. Are you or someone who will be buying the home a veteran?
And more often than not, one of these three mortgage types – conventional, FHA or VA – will be what fit your situation. But to determine your best option, hit me up and we can go over all of options.
How do you know if a conventional loan is the right option for you when buying a home?
As a mortgage lender there are 5 facts you should know.
It’s the most widely used loan type.
It gives you the most flexibility on down payments, PMI, property types and usages.
As a first-time home buyer, the minimum down payment is only 3%. And if you’ve owned a home before, the minimum down payment is 5% on a primary residence.
Rates and PMI are more credit sensitive.
Many sellers consider conventional offers more favorable than other loan types.
All of this doesn’t mean a conventional loan is the best for you. Check out the other options below.
Think you need to be a first-time homebuyer to use a Federal Housing Authority (FHA) loan? You don’t. And here are 5 other things you should know about his program.
An FHA loan likely will mean a lower interest rate and mortgage insurance than a conventional loan if your credit score is lower than 680.
If you’ve had a bankruptcy or foreclosure, you may be able to buy a new home sooner.
If you want to buy a multifamily home, the down payment is still only 3.5%.
The allowable debt-to-income ratio is higher with an FHA loan, which possibly allows you to qualify for a higher mortgage.
The mortgage insurance usually lasts for the entire loan.
If you or someone you care about is a veteran, here are 5 facts to consider when it comes to Veteran Administration (VA) loans.
VA loans don’t have a minimum credit score.
You may be able to have more than one VA loan at a time.
You can buy a multi-family home where you may live in one unit and rent the other out and the loan still has a 0% down payment.
If the appraiser thinks the home won’t meet the contract price, additional supporting info can be provided before the report is finalized.
The funding fee is waived if you have a service-connected disability.
Unfortunately, there may be some biases against the VA loan in the real estate industry. Spread the word so people know what an amazing program this is and how veterans can use the benefits they worked hard to earn.
While there are several other loan options, these three are the most common and a good place for you to start when searching for a mortgage.