Understanding The Different Loan Or Mortgage Option

Understanding The Different Loan Or Mortgage Option

What an exciting time in your life…you are buying a new home or well at least you are thinking about it. Buying a home will be an excellent way to build stability and develop pride of ownership.  A home purchase will provide you and your family a security blanket.  There will be many financial benefits to being a home owner such as home appreciation and property tax deductions. However, I am certain you may still have reservation. Buying a home is the largest investment you will most likely ever make, and should be considered very carefully. The more you educate yourself the better you will be prepared.  According to several mortgage statistics six million people become home owners every year. Maybe this year one of those will be you. Let’s get you prepared….

Today we will talk about mortgages. The majority of home seekers will need to obtain a mortgage to purchase their new home.  Simply defined a mortgage is a loan which is used to buy real estate and the lender uses the real estate for collateral. There are 4 major loan types you should familiarize yourself about.


VA

DOWN PAYMENT: 0%  CREDIT SCORE: 620+, DEBT TO INCOME: UP TO 57%, MORTGAGE INSURANCE: VARIES, PROPERTY TYPE: PRIMARY RESIDENCE (1-4 FAMILY UNITS HOMES, TOWNHOUSES, CONDOS)LOAN TERMS: 15-30 YEARS http://www.fha.com 


FHA

DOWN PAYMENT: 3.5% CREDIT SCORE: 620+,  DEBT TO INCOME: UP TO 56.99%, MORTGAGE INSURANCE: REQUIRED, PROPERTY TYPE: PRIMARY RESIDENCE (1-4 FAMILY UNITS HOMES, TOWNHOUSES, CONDOS)LOAN TERMS: 15-30 YEARS https://portal.hud.gov/hudportal/HUD?src=/buying/loans


USDA

DOWN PAYMENT: 0% CREDIT SCORE: 640+ DEBT TO INCOME: UP TO 46% MORTGAGE INSURANCE: REQUIRED PROPERTY TYPE: PRIMARY RESIDENCE (1-4 FAMILY UNITS HOMES, TOWNHOUSES, CONDOS)LOAN TERMS: 30 YEARS https://www.rd.usda.gov/sc


CONV

DOWN PAYMENT: 3%+ CREDIT SCORE: 640+ DEBT TO INCOME: UP TO 45% PROPERTY TYPE: PRIMARY RESIDENCE (1-4 FAMILY UNITS HOMES, TOWNHOUSES, CONDOS) 2ND HOMES AND INVESTMENT PROPERTY LOAN TERMS: 15-30 years.  http://www.investopedia.com/terms/c/conventionalmortgage.asp?-mt


You should prepare yourself by reading about each type of mortgage. Do you qualify? Does the real estate match what the lender defines they will finance? Do you have a low enough debt ratio? Do you have enough employment history? Do I have enough money to make my down payment? These are some of the questions you should ponder as you do your research.

I hope you have found this information informative and helpful.

 

DTI Explained

To calculate your debt-to-income ratio, add up all your monthly debt payments and divide them by your gross monthly income (Income before taxes or benefits are deducted).

PMI Explained

Required for FHA and VA loans, Private Mortgage Insurance (PMI) protects lenders or investors from possible loan default and is determined based on the loan to value ratio of the loan in question.

Streamline

Streamline refinancing is a way to speed up the home refinancing process by using the original loan's paperwork.


Laurie Rowe Headshot
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Phone: 803-518-1815
Dated: April 25th 2017
Views: 1,003
About Laurie: Let me help you with everything you need to know about buying or selling a home! As a real estate p...

1 Response

  1. CHEVY Babe

    I can not find the rental applications. Everything is for mortgage.\r\nKaren Williams

    Dec.27.2017

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