 |
Types of LoansMost Banks and Brokers have the same kind of loan programs available to them. Sometimes the Banks are a little more choosey as to who they loan money to while a Broker can be a bit more liberal with their lending practices. Sometimes a broker will not be able to do a FHA or VA loan, while sometimes the bank may not be able to do one of those loans. They all have different standards to which they will loan.A FHA loan is a common loan used for 1st time home buyers as it requires a low down payment. This type of loan requires a down payment of 3.5% of the purchase price of the home. The interest rates can be a little higher depending on your credit, and there is a fee for a FHA loan that gets added onto the purchase price and worked into the loan. This is a very popular and good way to buy a home. VA is a loan for people that have served and been honorably discharged from the military. The interest rates are low and there is no down payment required. This is a great way to buy a home if you have served in the military. Conventional is usually used when you have more money to put down on the home. They start with 5% of the purchase price required to be put down on the home. But you can put more money down if you like. Going conventional will give you a great interest rate. This is the easier way to buy, as the more you put down on a home, the more a lender will over look with the condition of the home. FHA and VA have guidelines as to condition. Unless you are a seasoned home buyer and have a “niche” situation, I would always recommend a fixed rate mortgage. Many people were put into an Adjustable Rate Mortgage (ARM) a few years ago. This is where you will pay a lower interest rate for a stated period of time, like 5 years, and then after those 5 years are up the rate will start to adjust up. Many people fell victim to this type of loan because their financial situation changed, they could not refinance and when the mortgage started to adjust they could not afford the higher payment. There are some other low or no down payment options available, but you have to meet certain income and credit criteria. A good realtor and lender will know what community programs are available based on your situation. |
|
BuyersSellersChoosing A LenderNew ConstructionContact