Hollywood Broker - Pre Approvals, Refinances, & Purchases
There are numerous considerations to take into account when it comes to ensuring you get the right home loan, especially in today’s economy. Let’s face it, there are many different loan types out there and only so many ways for you to get the home you want. That being said, let’s talk a bit about the different types of housing loans that you might take advantage of whether you are seeking your very first home, or looking to flip a property. Getting the funding is absolutely essential, and with that being the case, you will want to take a good look at all of the different loan types that you might take advantage of.
FHA Loans & First Time Home Buyers
For those who do not necessarily have the funding to make the full typical down payment on a housing loan, there is always the option to take out an FHA loan which are provided by the federal government rather than a lending institution. The thing to remember about typical loans is that they must be dealt with solely by the lending institution, and therefore they cannot take a risk on every single person. In fact, their policies prevent them from lending to those with lower credit, even if they want to.
In the case of an FHA loan which is backed by the federal government, the recipient of the loan would not be required to make the full down payment, and so long as you have a score of 580+, you should have no problem qualifying.
The FHA, or Federal Housing Association loan was designed for those who have the credit and the willingness, but do not necessarily have the money set aside to make a massive down payment. If you are just now getting ready to buy your first home and have limited funds, the FHA might be the best way to go.
VA Loan Mortgage Broker
For those who have served their country with honor there is always the option of choosing the VA loan. Veterans Assistance is offered by a variety of brokers, but there is still an approval process that you will need to go through in order to obtain the loan. This includes a review of your credit rating which, with most lenders is as follows:
- 620 - $417,000
- 720 - $417,000 / $650,000
- 740 - $650,000+
In addition to having a good credit rating you will also need to acquire a certificate of eligibility which can be ordered from the VA. By qualifying for a VA loan you will get a better deal and avoid the down payment that plagues traditional loans.
Reverse Mortgage Loans
There are many types of mortgages but most of them involve you paying the lending institution. This type of loan, the reverse mortgage loan, however, involves the loan company paying YOU. The loan is based upon the value of your home as well as your age. If you are 65 or older and have a decent credit score, you can obtain this type of loan and you will receive a monthly check until you have reached the value of your home, or until you and your spouse have expired. Something to keep in mind regarding the reverse mortgage loan is that even if you die, your spouse will continue to receive the payment until she dies, or until the property value is repaid. Upon the death of both individuals, the house will be turned over to the bank, as per the agreement. In order to qualify for this type of loan you will need to be 65 years or older, and you will need to plan on living in the home for the foreseeable future. One of the most common misconceptions when it comes to the reverse mortgage loan is that owner will be able to move out of the house and sublet to someone else. Actually, it is required by the lending institution that the loan holder be living at the home, and that they inform the bank if they have plans to leave the home for more than twelve months at a time. Still, this is a great way to supplement your golden years.
Conventional Mortgage Broker
A conventional mortgage will require you to have a decent credit score, and you will need to choose among several different types. For example, the most popular type of loan on the market will be the Fixed Rate Mortgage, which ensures that you will be paying the same price every month. Adjustable Rate Mortgages, or ARM, will have an interest rate that changes depending on the flow of the market. The choice is yours, but you will need to put down 20% of the total cost to get the ball rolling.
Jumbo Loan Mortgages
The jumbo loan is becoming a bit more common, and it encompasses amounts that exceed $800,000 to $1,000,000. These days, such loans are becoming less rare simply because the prices of homes are increasing steadily. Keep in mind that a jumbo loan has strict requirements and is almost always in the form of an adjustable rate mortgage.
These are the major loan types, and any one of them could be your ticket to a more enjoyable lie in your new home.