The first step to buying any home is financing. Knowing what you are able to afford is essential when searching for a home suited to your individual needs. With so many financing options available, it can be confusing. Every buyer wants to know that they have done the right thing and have chosen the best possible financing option for their particular situation.
Heres What You Need To Know About Financing
Finding the right financing for you is a matter of looking at the BIG picture. You as a buyer are an individual, and your financial landscape is unique to you. Your individual landscape must be examined holistically. Do you have a lot of debt? What is your credit score? How much do you have to put towards a down payment? Are you a first time home buyer? Are you a veteran? Do you want to live in the city or country? These are all questions that will help solve the puzzle of which loan is the right fit for your needs.
Types Of Loans
FHA – This loan was designed to fit the needs of first time home buyers. The minimum credit score for an FHA loan is 580. However, the limit has been known to move as low as 550 if the buyer provides a down-payment of 10% or more of the purchase price. The FHA loan does require mortgage insurance for the life of the loan on loans with less than 20% down.
USDA – The USDA loan is a great fit for those looking for a home outside of an urban area. The loan offers 100% financing but requires a minimum of 640 credit score. Additionally, the income of the purchaser must fit the requirements of this loan type and can not exceed the cap set for the purchasers particular area.
Conventional – A conventional loan features a down payment as low as 3% of the purchase price and debt-to-income ratios can be as high as 50%. However, this loan is best suited for borrowers with credit scores of 680 and above.
The information above is subject to change. For more information about whether or not you qualify for any of the above loans, it is best that your speak to a qualified mortgage loan professional. Please contact me directly, and I can assist you in finding an area professional who can give you an accurate overview of your loan qualification.