Who should I get qualified with?
There are a number of mortgage agents that will serve you well, but every transaction is treated individually.
Depending on the needs of the client, I will suggest different lenders. There are a number of criteria which are considered before any suggestion is made. Some of the things which influence which lender I suggest are the loan product recommended, the credit worthiness of the buyer, and the personality of the client.
There are a multitude of mortgage products available, and some are exclusive to a certain type of buyer, property, or location. All of these things must be considered when considering a lender.
The good news, buyers have a number of options, and I can respond to which options are best suited for my clients.
What type of loan is best?
With so many options available, it is often difficult to determine which loan best suits the client. The truth is there is likely more than one loan product which is well suited for every client's needs.
One of the most common loan types in the Eastern Panhandle of West Virginia is the USDA loan. The loan is great for first time buyers who should qualify for low interest rates if credit scores are 620 or higher. The USDA loan is only applicable to rural, and some suburban, properties so may not be available in select areas. There are income limits which vary with location and household size. A USDA mortgage can be used with no money for down payment. USDA mortgages typically come with slightly higher closing costs than similar loans and will be influenced by the cost of the home. Closing costs for a USDA mortgage are typically around $5,000 but may fluctuate as much as $1,500 +/-. Closing costs are negotiable and can be paid by the seller. A USDA mortgage is a great way to get into a home without many of the up-front expenses which otherwise prohibit home ownership.
One alternative is the FHA loan which is likely the most used mortgage product nationwide. The FHA loan program is attractive due to its attractive interest rates and flexible qualification requirements. Credit scores as low as 500 can qualify for an FHA mortgage with a down payment of at least 10%. Those with scores of 580 or better are required to pay a minimum of 3.5% down payment. The FHA program was recently adjusted to lower the PMI payment but still requires a 1.75% upfront premium and a annual premium which is paid monthly. FHA also has a special renovation program which appraises the value of a home after repairs and is able to finance up to $35,000 in nonstructural repairs.
Veterans of the United States Military and their surviving spouses often use the VA mortgage program for a home loan. The VA loan is a no down payment option with competitive interest rates and no PMI (private mortgage insurance). A VA-backed loan has stipulations on the amount of closing costs that can be charged and a few other protections unique to their product. There is a one-time funding fee for a VA mortgage, but the fee can be included in the monthly payment and reduced with a down payment. One very nice feature of a VA loan is that it is assumable by another VA qualified buyer.
Conventional loans come in all forms and will be offered by individual mortgage agencies and banks. Some of them require down payment; some of them do not. Many of these will be the best option because the requirements for each are more specialized. An Adjustable Rate Mortgage (ARM) is a type of conventional loan which can be a great product for specific buyers