That beautiful house just down the street, it’s the one you drive by and think to yourself, “If I had that house I would have a huge garden, swings for the kids and a garage to finally work on my bike.” Well, it just went on the market. There is a big, bright for sale sign in the front and on a whim you call the number for the asking price. Surprised at the price you begin to wonder if you could own it and think “Where do I start?”
Many people have driven by a house and wondered, “What if...” and that dream has been the motivation that pushed them into owning their own home. Most new home buyers start this way but don’t know where to start when they decide they are ready to own a home.
The best way to start shopping for a home is to first find out what you can afford and what program works best for you.
The conventional home loan is an option if you are able to afford a down payment of ten to thirty percent of the price. Generally twenty percent or more will exclude the buyer from paying mortgage insurance. Less than twenty percent, and the buyer will be required to pay a pretty hefty mortgage insurance.
Just what is mortgage insurance you may ask? Mortgage insurance is a policy that will compensate a lender in the case a loan goes into default. In other words, if the buyer is unable to pay the loan, then the lender can get compensation back from the insurance.
If you're a veteran, the best option would be to use your VA home loan guarantee. This is our preferred loan option because it has the best interest rates with the lowest amount of upfront costs.
The VA loan is a government backed loan program designed to ease the burden of purchasing a home for military veterans. The VA does not actually lend the money, it simply guarantees the loan for the lender. This allows lenders to give our veterans a chance to own their own home without having to pay a down payment or pay mortgage insurance - a huge savings!
Of course if you are not a veteran then you still have other options. The FHA loan is another Federal Government program that helps by lowering the down payment for a home to as low as three and a half percent. The mortgage insurance still applies though. The benefit is that the buyer can still make a purchase if all they can afford is three and a half percent.
There you have it! Three loan types, now all you have to do is contact us and we will help you find the best program for your individual situation.
The loan process is very simple. Either call or stop by as you will always find a real person to speak with and fill out an application. Your loan officer will then ask for things like work history, bank statements, income statements and look into your credit history. This is to ensure you get the best loan possible. After all, you just might be able to afford that cute little home down the street after all.