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Home Purchase: As a Mortgage Lender Since 1987, I am Very knowledgeable in Conventional, FHA, VA & Rural Development loans (RD Loans). I can explain in layman terms for you the differences, and help you find the best loan to fit your needs. Here is what I believe is a brief synopsis of the Loans that I specialize in. This is a very limited description, and usually a more thorough discussion is advised for a prospective Buyer to gain more knowledge and understanding of the programs.
Conventional Loans: Conventional Loans require larger down payments than other loan types. Typically, you see down payments on conventional loans in 5% increments as the PMI rate drops for each additional 5% down. Advantages with a Conventional Loan is that the PMI may be cheaper than RD’s version of mortgage insurance, and is almost always cheaper than the FHA loan’s version of mortgage insurance. For down payments of 20% or more, no PMI is required on Conventional Loans. Additionally, the Home Owner may have the PMI eliminated after 2 years of timely payments if they can prove 20% equity. A disadvantage for many home buyers is the larger down payment requirements for conventional loans. Another disadvantage is they can also be more difficult to be approved than FHA, VA & RD Loans, based on such things as time on the job, debt-to-income ratios, credit and verifying savings for the down payment. To see a company PMI rate chart click here.
FHA Loans: FHA loans only require 3.5% down, and all the money may be gifted from a close relative. FHA interest rates may be the lowest rates available, and often the Lender pays the Borrower at closing on the HUD-1/Closing statement, rather than the Borrower paying the Lender. This is known as a “Lender Credit” and offsets 3rd party closing costs and/or property taxes and insurance. Underwriting guidelines are more lenient for FHA loans than perhaps any other conforming loan. The disadvantage with FHA is that the mortgage insurance paid in the monthly payment is higher than any other loan type. Please let me know if you would like more information on how Lender Credit’s may offset 3rd party closing fees and/or property taxes & insurance. (FHA Approved Condo Website)
VA Loans: VA Loans in my opinion offer the best terms of any mortgage type, other than a 20% down Conventional Mortgage. And why not…? The VA mortgage is one small benefit that we can show as a thank you and as our appreciation to our Men & Women who have protected our freedoms by serving in the Armed forces. The VA Loan is a Zero down Loan, with Low interest rates, and No Monthly Mortgage Insurance! Contrary to some people’s opinion, the VA loan is NOT a hassle, and they often close as quickly as FHA Loans – within 28 days. The disadvantages for the VA loan are very limited (if any), and would usually apply specifically based on the particular transaction. Veteran’s – Please let me know if you need assistance in obtaining your “VA Certificate of Eligibility” necessary for a VA home loan. To view the VA approved condo website. Click here. To view official government sponsor VA Home Loan Website. click here.
Click Here to see a history of the VA Loan.
RD Loans: These loans are almost identical to the VA loan in that they are zero down and have very good interest rates. The main difference is that they do have some mortgage insurance, called a “guarantee fee” paid to the USDA and is part of the Buyer’s monthly payment. The RD Loan also takes longer to process and close than other loan types. There are income limits, and the Home has to qualify as being in an “eligible area.” However, you might be surprised as to what areas do qualify as being in eligible areas – you don’t need to buy in “tin-buck-two.” Please let me know if you would like me to send you a link to the RD website, or if you need information on the Income limits for the County you wish to purchase in.
MSHDA Loans: MSHDA is an acronym for “Michigan State Housing Development Authority.” It’s mission is to “enhance economic and community vitality through housing and historic preservation activities.” We are a participating MSHDA lender, offering FHA, VA, USDA-RD and conventional loans combined with lower than market MSHDA rates, and/or MSHDA Down Payment Assistance. These programs are for first time home buyers, but in many cases, may be available for prior home owners. Please contact me for details on the various programs, and to see if you qualify for MSHDA financing.
For more information on Mortgage Loan Programs, or to set up a meeting to discuss your financing options further, please call me at (616) 292-6703, or email me at: email@example.com