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Julie Reddington's Blog
By Julie Reddington Realtor ® ABR® Relocation Specialist |
Agent in
Highlands Ranch, CO
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Ready to Buy but not sure what Loan is right for you ??
Posted under: Home Buying in Douglas County
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July 12, 2010 5:08 PM |
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Wondering what loan is best for you? Here is a guide to different types of loans:-
Conventional
* Minimum down payment: 5% for Primary Residences and 2nd Homes, investors 15%
* To avoid mortgage insurance: down payment is greater or equal to 20% or if doing a first and 2nd loan combination
* For optimal interest rate, credit must be at or above 740. Credit rates increase as credit score decreases below 740
* Jumbo Loans = loan amounts above $417,000 - rates will be higher
FHA
* Minimum down payment of 3.5%
* No investors
* Credit must be a minimum of 620
* Everyone gets same great rate, despite credit score
* Will have mortgage insurance for a minimum of 5 years, despite amount of down payment
* Monthly mortgage insurance = .55% x Loan Amount/12
* There is an upfront mortgage insurance premium rolled into all FHA loans = 2.25% of loan amount
* Lending limits based on county. For all Denver metro counties maximum loan amount = $406,250. For other CO county limits, go to: http://www.fha.com/lending_limits.cfm, click on Colorado
* Anyone can do a FHA loan, no income limits, does not have to be a first time home buyer, can do multiple FHA loans, but can only have 1 FHA loan at any given time
* If you are approved FHA, you are eligible for the FHA 203K Loan - allowing you to roll in money for repairs, remodeling, updating, renovating into loan at the time of purchase or refinance. (You can roll in more than $35,000 (common misconception)
VA
* Veterans (Must have been Active Duty for 180+ days
* No down payment
* No investors
* No mortgage insurance
* There is a VA funding fee rolled into loan amount. 1st use of VA loan = 2.15%, 2nd use and thereafter = 3.3%. If can prove at least 15% disability, this fee will be waived.
* Credit must be a minimum of 620
* Everyone gets same great rate, despite credit score
* Can have multiple VA loans
* Must order appraisal through VA. This can take up to 10 business days, no way to expedite. Once ordered, it cannot be cancelled.
* Maximum Loan amount = 417,000
* VA will not allow buyer to pay specific closing fees . These are referred to as non-allowables in your contract. The only items the Buyer is allowed to pay: origination fee, credit report fee, appraisal, prepaids. Everything else must be covered by Seller or Lender. Make sure your contract reflects these fees covered by Seller.
Julie Reddington
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