Know Your Mortgage Options Before Buying Your First Home


Know Your Mortgage Options Before Buying Your First Home.

 

FHA
The Federal Housing Administration’s lending standards are designed to allow buyers who either don’t have a lot of cash to put down, or don’t have a high enough credit score to be able to buy a home. This makes FHA loans very popular among first-time buyers. As of this writing, the FHA requires just 3.5% down and a FICO score of 580, or even lower if the down payment is higher (although specific lenders may have slightly higher requirements).  This flexibility does not come cheap, and there are several costs to be aware of before applying for an FHA mortgage.

The FHA charges a 1.75% upfront fee when issuing a loan, in addition to requiring borrowers to pay FHA mortgage insurance as long as they have the loan. This is charged at an annual rate of 1.35% of the average loan balance. 

So, on our $200,000 example, this means an upfront fee of $3,500 plus a mortgage insurance payment of $225. This adds more than 20% to the monthly principal and interest payment, a significant expense.

USDA
The U.S. Department of Agriculture guarantees mortgages offered to buyers of homes in rural areas. Just like FHA loans, they have relatively easy qualifications when compared with traditional loans, and offer up to 100% financing. However, you must purchase in a rural area as defined by the USDA, and be under the maximum income requirement for the particular county you’re interested in.

VA
If you or your spouse ever served in the armed forces, a VA loan could be a very attractive option for you. VA loans are available with no down payment whatsoever, and have similar credit requirements as FHA loans. Unlike FHA loans, they require no mortgage insurance, making them a very attractive option to those who qualify.

Know Your Mortgage Options Before Buying Your First Home

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Author: Louisville Kentucky Mortgage

I have helped over 589 Kentucky families buy or refinance their home over the last 18 years. Realizing that this is one of the biggest, most important financial transactions a family makes during their lifetime, I always feel honored and respected when I am chosen to originate their personal home loan. You can count on me to deliver on what I say, and I will always give you honest, up-front personal attention you deserve during the loan process. I have several advantages over the large banks in town. First, I can search and negotiate for your loan options through several different mortgage companies across the country to get you the best deal locally. Where most banks will offer offer you their one set of loan products. I have access to over 10 different mortgage companies to broker your loan through to get you the best pricing and loan products that may not fit into the bank's program due to credit, income, or other underwriting issues. You will not get lost in the shuffle like most borrowers do at the mega banks; you're just not a number at our company, you are a person and we will treat you like one throughout the entire process. Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications. Email me at kentuckyloan@gmail.com with your questions I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance. This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. NMLS# 57916 http://www.nmlsconsumeraccess.org/ Joel Lobb Senior Loan Officer (NMLS#57916) American Mortgage Solutions, Inc. 800 Stone Creek Pkwy, Ste 7, Louisville, KY 40223 phone: (502) 905-3708 Fax: (502) 327-9119 kentuckyloan@gmail.com Company ID #1364 | MB73346 http://mylouisvillekentuckymortgage.com Equal Housing Lender

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