Getting Loan & Down Payment
If you are a first time home buyer, chances are you have plenty of questions about the kind of down payment you’ll need, becoming qualified, and different loan options. Although I’m not a loan officer, I’d like to answer some of the questions you may have, and give you a very general idea of some things to consider before you make an offer on a home.
The two most common loans are Conventional, and FHA.
Conventional Loans:
This type of loan is probably the one used most. The biggest difference between a conventional loan and an FHA loan is that a conventional loan requires a larger down payment. This ends up being as low as 5% for an owner occupant conventional loan, or 20%-25% on an investment that you don’t intend to owner occupy. With a 20% down payment, mortgage insurance isn’t necessary. Mortgage insurance is usually around $100 a month and protects the lender. It’s a ripoff in my opinion.
FHA Loans:
Federal Housing Administration loans are government insured loans that were created to help lower income families get into homes without having to pay a huge down payment.
Generally, the down payment on an FHA loan is 3.5%. There are several conditions that must be met in order to obtain an FHA loan.
First, they need to be owner occupied. When buying an investment, parents many times add a son/daughter that will be occupying the property, and take advantage of the low down payment. FHA loans must also get an FHA appraisal, which is more extensive than a conventional appraisal, and includes an inspection. There are also limits to the amount you can borrow.
Finding a lender
It’s important to find a local lender who has relationships with local appraisers and local title people.
A lender who will return calls, works hard, and is honest.
I can recommend several that I know will do good job.
Interest rates can vary depending on which loan programs the lender has access to, so you should check around.
Closing costs:
Seller: you are responsible for paying the real estate commissions, and around 1% that the title folks charge to get things closed.
Interest Rates: Another thing to consider when purchasing a home is the current interest rate.
The interest rate is the percentage that a lender charges on the principle balance of the loan.
Interest rates can drastically influence your mortgage payment every month.
Loan amount Interest Rate Monthly payment $100,000 10% $1022 $100,000 9% $949 $100,000 8% $878 $100,000 7% $809
PREFERRED LENDERS
I HAVE BEEN WORKING WITH ANDY LARSEN FOR OVER 30 YEARS. HE IS MY PREFERRED LENDER. HE IS A LENDING BROKER, SO HE'LL SHOP AROUND FOR THE BEST RATES.
CELL: 801-636-7200
OFFICE: 801-434-7337
EMAIL: ANDY@VELOTCIYHL.COM
ANOTHER LENDER I LIKE IS SAM IVEY. HE SEEMS TO BE ABLE TO MAKE THINGS WORK WHEN OTHER LENDERS HAVE BEEN UNABLE TO FIND AN EXCEPTABLE LOAN. HE'S MY DIRTBIKING BUDDY.
CELL: 435-773-7826
EMAIL: SAM.IVEY@ACADEMYMORTGAGE.COM