Every buyer has unique needs when it comes to financing a home and we can help you navigate the process.
FHA Loans:
PROS
- Down payment as low as 3.5%
- Often better rates than conventional for buyers with lower credit scores
- More lenient credit guidelines
- Often lower MIP (mortgage insurance) rates than conventional
CONS
- If you put less than 10% down, you pay MIP for the life of the loan (often people will refinance into a conventional loan in order to drop the MIP)
- Many condos are not FHA approved
- Owner occupied homes only – no vacation homes or investments
VA Loans:
PROS
- 0% down payment
- No MIP – no recurring private mortgage insurance payments
- More lenient credit restrictions
- Lower interest rates
- Higher debt-to-income ratios
- No prepayment penalty
CONS
- Owner occupied homes only – no vacation homes or investments
- VA Funding Fee – an upfront fee that can often be wrapped into the loan payments
- May need some extra time for closing
- Active Duty, Reservists, and Military Veterans only
Conventional Fixed Rate Loans:
PROS
- Down payments as low as 3%
- No PMI with 20% down payment
- PMI automatically cancelled when you reach 78% loan-to-value ratio
- Can be used for vacation homes and investments
CONS
- Higher interest rates for lower credit scores
- Debt-to-income ratios are lower
- Tougher credit requirements
- Need to be able to show money in “reserves” on top of down payment/closing costs