In this day and age with lending requirements becoming very difficult to obtain financing, it is good to know all of your financing options when you are about to make a real estate purchase. There are so many different products out there for you to personalize to your specific needs, or create value in the purchase. Whether you are a first time home buyer, investor, builder, veteran, etc., you can find a way to make the purchase happen. Right now we are at record lows with interest rates and purchase prices and honestly, we will never see this great combination in our lifetimes again.
Another nugget I would like for you to remember is when you are shopping the lender market, meet with three different lending sectors. Well Terrence, what does that mean? It means meet with a commercial bank like Chase, Wells Fargo, Bank of America. Then meet with a local bank in your community. These are banks that only have branches in your town like Bank N Trust, Extra Co Bank, Citizens Bank in B/CS. Finally, meet with a Mortgage Broker. This is someone who can really be aggressive and shop the market to get you the best deal. For example, Prime Lending or 1st Alliance Mortgage. The reason why I suggest that all of my clients to do this is to get a snapshot of all three major sectors of the lending market and let them compete for your business. Most commercial banks will be in the same ball park and most local banks will be similar, etc. So let me list of few of the financing options below:
•USDA-640 credit score or better, 100% financing, 2% upfront funding fee, monthly mortgage insurance premium is .3%, income limit restrictions.
•VA-640 credit score or better, 100% financing, 2.15% upfront funding fee, no monthly mortgage insurance.
•FHA-640 credit score or better, minimum down payment is 3.5%, 1% upfront funding fee, monthly mortgage insurance is 1.15%.
•Conventional-620 credit score or better, rule of thumb is 20% down payment, but minimum is 5% down payment, no funding fee, no monthly mortgage insurance if you put down 20% or more
•Commercial Investment-Based off balance sheet, net worth, specific deal and assets, 15-20% down payments, funding fee ranges from 1-2%, no mortgage insurance.
•Lot Loan-620 credit score or better, 25% down payment, 1% upfront funding fee.
•Physicians, Professionals-680 credit score or better, show proof of income, 100% financing up to $417,000, no monthly mortgage insurance. 95% financing up to $650,000. 90% financing up to $750,000.