So you’re refinancing or buying a home, maybe you just want to do some improvements and you know you need a mortgage.
Here’s a crash course on a few different types of loans:
A conventional loan is a loan not insured by the government. This means there’s no guarantee for the lender if you fail to repay.
• Because it’s not insured, a conventional loan requires a 20% down payment.
• Can’t do 20%? Then you’ll need to have private mortgage insurance (PMI). PMI picks up the tab for your lender if you happen to default on the home.
An FHA loan is a loan insured by the Federal Housing Administration (FHA).
• Because it’s insured, a lender can offer a down payment as low as 3.5% of the purchase price.
• You’ll need a credit score of at least 580 with 3.5% down, and 500 with 10% down.
A VA loan is a loan guaranteed by the Veterans Administration (VA). It is only available to current members of the U.S. armed forces, veterans, national guard or reserves, and surviving spouses.
• There is no minimum down payment or PMI required for buyers purchasing a primary residence.
• Borrowers do pay an initial funding fee — a one-time charge between 1.25% and 3.3% of the loan amount.
𝙃𝙀𝙇𝙊𝘾: (Home Equity Line of Credit)
They are a revolving source of funds, much like a credit card, that you can access as you choose. Most banks offer a number of different ways to access those funds, whether it’s through an online transfer, writing a check, or using a credit card connected to your account. Unlike home equity loans, they tend to have few, if any, closing costs, and they usually feature variable interest rates—though some lenders offer fixed rates for a certain number of years.
• Loan Amounts from $510k up to $3M
• Qualify with credit scores as low as 680
• As little as 15% down payment
• Can use Business Funds and Retirement Assets to qualify
• Interest only ARMs
If you need more information or have questions about real estate, shoot me a message at 954-995-4711. I can also give you contact info for a few trusted lenders that my clients use and love. I’d love to listen and help in any way I can!
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