If you plan to finance your home purchase, one of the first steps in your home buying process is to get pre-approved for a mortgage. It is important to get pre-approved early in your home search so we can focus the search on homes that we know are in your price range.
It is also important to have your pre-approval letter ready so when you find the perfect home we can submit your offer with your pre-approval letter attached. Including a pre-approval letter with your offer makes it competitive against other offers and more appealing to the seller.
If you don’t already have lender, please contact me and I would be happy to recommend several excellent lenders in the area for you to choose from.
Below you will find a brief description of the most common loan programs. If you have questions about a loan program or if you need help determining which program is best for you, you should contact a reputable lender.
Conventional:This loan is offered by the private business sector, as opposed to those insured or guaranteed by the US Government (FHA or VA loans, for example). A conventional mortgage loan may or may not require Private Mortgage Insurance, depending on the size of the loan relative to the value of the property. A down payment of 20% or loan to value of 80% would not require mortgage insurance. Conventional loans are generally underwritten based on the qualifying guidelines set by the Federal National Mortgage Association (FNMA, or Fannie Mae) or the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac), both of which are private corporations supervised by, but not a part of, the Federal Government.
FHA: These loans are insured by the Federal Housing Administration, a division of the US Department of Housing and Urban Development (HUD). This type of loan is available to the general public, and is often popular with first-time buyers because of the small down-payment requirement and generous qualifying guidelines. The current minimum down payment required is 3.5%. FHA charges the buyer a mortgage insurance premium (MIP) for this loan insurance.
VA:These loans are guaranteed by the Department of Veteran's Affairs. This type of loan is only available to eligible veterans, and usually requires no down payment.
USDA Guaranteed:This is a government insured 100% purchase loan. These loans are only offered in rural areas and serviced by direct lenders that meet federal guidelines.
HomePath:The Fannie Mae HomePath financing program is designed to help potential buyers buy a home that is currently owned by Fannie Mae by giving them a great deal on the HomePath mortgage financing package. No mortgage insurance or appraisal is required. (Eligible properties only)
HomePath Renovation:The Fannie Mae HomePath Renovation financing program is designed to help people who are planning to buy a home that is currently owned by Fannie Mae, making it their primary residence and the home is in need of a few repairs. Appraisal is required. No mortgage insurance required. (Eligible Properties only)
203K: This is an FHA loan program designed to help finance the rehabilitation and repair of run-down properties. It has been utilized as a primary tool in revitalizing run-down neighborhoods. The program would follow the FHA guidelines above.