- CONVENTIONAL LOANS
These are considered strong loan's in the seller's eyes. You can use this loan for a primary or to buy an investment home. Typically, you put 20 percent down or as little as 3 percent down on loans backed by Fannie Mae or Freddie Mac and credit score vary to qualify but must be at least 620. Your rate is slightly higher and more difficult to qualify than FHA Loan and reserve money may be required. Private mortgage insurance is required for loans 80 percent loan to value.
- JUMBO LOANS
These loans are conventional loans, however, have non-conforming limits to borrow. Meaning homes exceed limitations for all single family homes to buy over 453,000 and high cost localities more or less 680,000. Down payment required is 10-20 percent. The minimum credit score required is 700 and as low as 660 for some lenders. Debt to income ratio below 45 percent. 10 percent of cash reserves based on the loan amount to buy homes.
- VA LOANS
This is the best of all loans with extremely low rates compared to others and no money down payment required to purchase a home. Typically 500.00 down with a pre approval letter and contract generally works. No mortgage insurance required, closing cost is capped and may be paid by the seller. A one time funding fee is required based on the value of home and can be rolled into the loan or you may use your IRA just prior closing without penalty. Show receipt to your tax accountant so that you will not get an early withdrawal penalty if required. "Check the current law under this condition".
- FHA LOAN
This loan is a common first time buyer loan and the minimum score is 620 in many cases. If lower you will pay a premium interest rate because of risk, however, they can go as low as 585 and vary from bank to bank. You will have mortgage insurance. 3.5 percent of the loan before closing and this can be a gift from a family member. The letter is provided from family member and these funds must be in your account and seasoned for at least 60 days or more.
- ADJUSTABLE RATE MORTGAGE LOAN
These loans can be tricky if you do not know what you are doing. They can increase or decrease based on the stock exchange. Generally the rates are low to get you at home and gradually increase then has a cap that they cannot exceed. These types of loans can work for the right situation, especially if you are promised a salary increase and you could refinance in a few years. Also, you can save an abundant amount of money the first couple of years. "Read the fine print".
- USDA LOANS
These loans are focused on "rural areas" with 100 percent financing. These loans are backed by the government. The con is that when they run out of USDA money that is it. Ensure you purchase and close before the fiscal year. 620 credit score required and vary from lender to lender.
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