The home buying process is such an emotional and stressful experience. During this process, you’ll also want to find a type of mortgage that best suits you and your situation. There are many different types of Home mortgage options available, so how do you know what type of mortgage loan is best when buying your home? We will discuss the options available and what is required to qualify for each.
Where Can I Find the Best Mortgage Loan Officer Near Me
It’s fairly simple to find mortgage loan officers in your area. The challenge is – where can I find the best home loan officer near me? With all of the options given to you through a simple internet search, how do you filter to find the one you need?
There are a few things that you need to keep in mind and some questions that you need to ask when deciding what type of mortgage loan is best when buying your home.
What Type of Home Mortgage Loan Do You Need
The first thing that you should ask yourself is, “what are my needs?” Basically meaning – what type of mortgage do you need? Determining this will make the selection of a loan officer easier. Are you in need of an FHA mortgage, a Jumbo loan, an Adjustable Rate Mortgage, or a Renovation Loan?
There are other situational questions that you should also ask. Is this your first time to buy a home? How high or low is your credit score? All of these questions will help you be prepared to meet with a loan officer. It will also help you figure out how much experience they have in handling clients in a similar situation as your own. Don’t be afraid to ask them tough questions – it is your money.
What Questions Do I Need to Ask My Mortgage Loan Officer
You might now be wondering, “what questions do I ask them?” One of the best things to ask about is the amount of time that they’ve been a mortgage loan officer. The more experienced the better.
Also, ask the loan officer for their NMLS number (Nationwide Mortgage Licensing System). Using this number, you can look up their track record and see if their have been any complaints or problems that have occurred in the past. You should also ask them how long their processing time is for whichever mortgage you need.
Great loan officers should always be in constant communication with all parties involved – their clients, realtors, title companies, and even departments within their own company. Having this open communication will help ensure you that your rates will be protected and locked in.
In this day and age, loan officers should be tech savvy. The different software programs used in today’s mortgage world are complex and require a great amount of knowledge. If your loan officer isn’t well versed in technology, it is likely to slow down the entire process; they’re likely to spend too much time navigating through the systems and not enough time working to fulfill your needs.
Keeping all of these things in mind will help make your job easier. Knowledge is truly power when searching for a trusted, loyal mortgage loan officer.
What Type of Mortgage Loan is Best When Buying Your Home
Typically, the initial rates are more favorable than those of a fixed-rate loan, attracting many homebuyers.The most common type of ARM is the 5/1 – this is where the rate remains constant for 5 years, changing each year after that.
What are the Best Types of Home Loan for First Time Buyers
Purchasing your first home is likely one of the biggest decisions a person will make in their life.
That’s why you want to take all of the necessary steps to ensure that you get the best bang for your buck and don’t break the bank. One of the major steps to take is finding out which method of financing is right for you and your situation.
A few of the first time home owner loan options available to first time home buyers are as follows:
1. FHA Loans
This is a loan program that has been set up by the Federal Housing Administration (FHA), under the United States Department of Housing and Urban Development.
FHA loans are great for people who have never bought a home before due to their low down payment requirements; with payments as low as 3.5%. This is also one of the easier types of loans to qualify for; when applying, they consider credit scores that are not-so-perfect.
2. Conventional LoansUnlike FHA loans, conventional loans are not backed by the government. They are fixed-rate mortgages that are more difficult to qualify for than their FHA counterparts. In order to qualify, you’ll need a high credit score and a stable income; you’ll also need to purchase private mortgage insurance. For conventional loans, there are strict requirements set by Fannie Mae or Freddie Mac. They come with either a fixed or adjustable rate.
3. VA LoansIf you are a service person or veteran, a VA loan is likely the best option for you. VA loans are backed and guaranteed by the US Department of Veterans Affair (VA). These loans come with great terms and are easier to qualify for that conventional loans. In order to apply for the VA loan, you must first seek approval from the VA; they will then give you a certificate of eligibility that allows you to apply for a VA loan.
First Time Homeowner Bond Loan Program
If you’re in the low to middle-income class, a bond loan program might be the best option for you. These bond loan programs are created by local and state governmental authorities to help these families become homeowners. They do so by offering lower interest rates and even cash assistance. Making that transition from renting to buying is a terrifying journey, but bond programs can help ease the process.
What is a Bond Loan Mortgage
How to Qualify for a Bond Loan Mortgage
How are Interest Rates on Home Loans Calculated
Given this information, you should ask your mortgage loan officer many questions. This will help you get the best rate possible.
What is a Conventional Mortgage Loan
What Are the Conventional Home Loan Requirements
There is also a limit to the loan amount. In most cases, the loans amount is limited to $417,000 in the United States (as of 2016), with homes in higher-cost locations stretching into the $600,000 range.
Conventional loans typically require you to cover the mortgage insurance and fees for the appraisal and origination. This makes conventional loans one of the highest out-of-pocket loan options.
How Much is Mortgage Insurance on a Conventional Home Loan
The cost of conventional mortgage insurance varies. If your down payment and/or credit score is low, then the premiums for the mortgage insurance are likely to be high. This premium for the insurance typically runs anywhere from $25 to $75 per month for every $100,000 borrowed. For example, if you borrowed $200,000, the premium is priced anywhere from $50 to $150. PMI is typically only required for people who put less than 20% down on the home so that the lender can be protected in the case that the borrower defaults.
How Much is Mortgage Insurance
The FHA and VA provide public mortgage insurance to those who put less than 20% of their home value down when purchasing a house. This causes you to pay a higher premium at the time of purchase and for each monthly payment until you have reached the 20% mark. This premium is around 1.5%-1.75%, meaning that you could be paying up to 6.25% of the mortgage cost until 20% of the mortgage is paid off. Once you reach the 20% mark, the public mortgage insurance goes away and you only make payments on your mortgage.
How Do I Qualify for an FHA Loan
Additionally to credit score and down payment amount, there are other requirements that you must meet in order to qualify for an FHA loan. You must be able to prove that you have steady employment for the past two years. There is also a minimum amount set up by the FHA that you must borrow; this so-called ‘floor’ is $275,665.
There are also FHA loan limits to the amount you are able to borrow; this ‘ceiling’ currently sits around $636,150 and varies in different parts of the United States. If a person has gone into bankruptcy, you must be at least two years out of it and show that you have re-established good credit standing. If a person has gone through foreclosure, you must be three years out of it and have re-established good credit.
Always check with a expert mortgage loan officer; they will be able to see your options for your current situation.
There is no minimum amount attached to streamlined 203k loans. Depending on what kind of upgrades your home will need will determine which 203k loan is right for you.
FHA 203K Loan Requirements
In order to qualify for a 203k FHA loan, there are certain requirements the borrower and the property must meet. The home must be at least a year old and no more than a four-family home. The value of the home cannot exceed the FHA limit of $636,150 – depending on what part of the US you live, as stated previously. In order for an individual to qualify for this loan, they must meet the requirements set by the FHA. The ideal credit score range to fall between is 620 and 640. However, there are instances where individuals with a credit score under this have qualified – where they have offered a higher down payment amount. Talk with a trusted mortgage loan officer to find out your options.
What is an ARM Loan?
What are the Benefits of an ARM Loan
Additionally, there is a chance that interest rates will fall after this period has come to a conclusion. You even have the ability to refinance your home for up to 95%, with a down payment of only 5%. ARM loans are also available through the FHA and VA, offering more flexible requirements and guidelines to follow.
Jumbo Home Loans
What is Considered a Jumbo Loan
What are Some Jumbo Loan Requirements
VA Home Loans
How to Qualify for a VA Loan Mortgage
VA Home Renovation Loan
I Need a Home Renovation Loan
1. Standard (Full) 203k– Structural repairs– Foundation repair– Major landscaping corrections (such as grading)– Completing an attic– Relocating a load-bearing wall– Addition of a room
2. Streamline (Limited) 203k– Kitchen remodel– Bathroom remodel– New flooring– Painting– Sewer replacements– Roof repairs (shingles, gutters, downspouts, etc.)– Window replacement
What are the Qualifications for Home Renovation Loans
How Can I Get a First Time Home Buyer Renovation Loan
How to get a Home Renovation Loan for Your Home Renovation Project
Construction Loans for Home Renovation
1. Construction-Permenant MortgageThis type of FHA loan will help fund a construction project that starts from scratch. If can help fund the purchase of the lot and the cost of the contractors to build the home.
2. 203k Rehab MortgageThis type of FHA loan is perfect for people who have purchased a home that is in need of major renovations or updating. This loan is even good for projects such as rebuilding.
What are Some Home Renovation Loan Options
How Do Home Renovation Loans Work
What is a Reverse Mortgage
Is a Reverse Mortgage Home Loan a Good Idea
Reverse Mortgage Pros and Cons
Pros:– You can continue to live in your home while receiving the benefits.– You can retain the title to your home.– Enables you to live a comfortable retirement.– Monthly mortgage payments are not required (only if you live in the home).– Remain equity after the loan is paid off goes to your heirs.– It will not affect benefits received from Medicare or Social Security (typically).
Cons:– Extracting equity leaves less assets to your heirs.– If the home is not maintained, the loan will become due.– The fees may be higher than typical mortgages.– Your heirs will have to repay the balance of the loan.
How Reverse Mortgage Works to Provide Income in Your Retirement Years
How to Find a Reverse Mortgage Loan Officer Near Me
Finding a trusted person to serve as your reverse mortgageloan officer is important. But how can you trust that you’re getting the best?
One major way you can check is by doing a search a general online search. This helps you come up with a list of potential officers. Then, you’ll want to find out their NMLS number an use it to do a search of their track record. This number is set up by the Nationwide Mortgage Licensing System & Registry in order to ensure that lenders and lender companies are following all regulations.