Monday, March 19, 2018

4 Different Loan Products for Homebuyers

As a homebuyer, you should know what your options are when it comes to financing your purchase. I’ll go over four different types of loans for you today.

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There are a number of different loan products that you can use to purchase your home. I’ll go over four of them today. 

The first and most popular loan is conventional financing backed by Fannie Mae or Freddie Mac. This loan requires 5%, 10%, 15%, or 20% down, and you can use this option on a condo or single-family home. 

The second is FHA financing. An FHA loan lets you move into a home with as little as 3.5% down. The private mortgage insurance rate does end up being a bit higher, but the FHA loan also works well with a lower credit score. 

   An FHA loan lets you move into a home with as little as 3.5% down.

The 203k loan is similar to the FHA loan but it allows you to rehab the property. The 203k program gives you money to make upgrades and renovate the home. Of course, they are going to come in and monitor the work to make sure that it’s done by a qualified contractor. Still, that’s a great product if you want to renovate a bank-owned or short sale property. 

The final product is the homestyle loan. This is similar to the 203k loan but you do have to put a bit more money down than you would for an FHA. You can’t use the FHA or 203k on a condo, but you can use a homestyle loan. The homestyle loan will also finance construction costs. Again, they will monitor your process to make sure you are working with a qualified contractor. This is a great product to use.

If you have any other questions about buying a home, just give me a call or send me an email. I would be happy to help you!