The word mortgage can be scary and yes, overwhelming to understand, but having a Realtor and a knowledgeable mortgage lender to guide you is key.
There are several options for you when obtaining a mortgage that a lender can chat with you about.
If you qualify for a VA loan, some benefits are:
* No down payment
* No mortgage insurance [PMI]
* Government guarantee. ...
* No prepayment penalty
* Easier to qualify
* Closing costs are lower
Who is Eligible?
- Current Active military duty or you’re a veteran who was honorably discharged and met the minimum service requirements.
- Served at least 90 consecutive active days during wartime or at least 181 consecutive days of active service during peacetime.
- Served for more than six years in the National Guard or Selective Reserve.
- If your Spouse died in the line of duty, you may qualify for a VA loan.
Some properties do not qualify for certain financing, that's why you need to have your financing in order when getting ready to purchase a home.
Example:
🙋 Most condos will not qualify for FHA or VA financing because you do not own the land and frequently there is a high ratio of rentals in the community.
🙋 if you are planning on purchasing through financing condos that are run as resort properties and offer amenities such as check-in desks, maid services, room service, etc. you will need a special loan "Condotel Loan"
So what does this mean for you as a buyer? Here are the pros/cons and why this loan may be the best option for you.
Pros of this loan.
-Can be used on Primary, secondary, or investment properties
- Borrowing costs tend to be lower
- You can ask the lender to cancel PMI once you gained 20% or more equity.
Cons of this loan.
- Higher Credit Score Needed
- Debt-to-income ratio must be 45-50%
- Significant documentation required to verify income, down payment, and employment
Let's Review. So who should get a Conventional Loan?
Ideal for borrowers with strong credit, stable income and employment history, and a down payment of at least 3% of the loan.
LENDER
As far as major homebuying decisions go, choosing the right mortgage lender is right up there with finding a dream home. Going with the first lender on your radar could cost you time and money, so it’s critical to shop around before choosing your mortgage company. The following 9 questions to ask a mortgage lender can help narrow down your list.
1. Which mortgage programs do you offer?
2. What’s my minimum required down payment?
3. What’s your origination fee?
4. Do I qualify for down payment assistance?
5. What are all the costs I’ll need to pay to get a mortgage?
6. What is my estimated mortgage interest rate?
7. Am I being charged points for my quoted mortgage rate?
8. When can I lock my interest rate, and what’s the fee?
9. Will you service my loan after closing?
