When you are looking to buy a property, unless you are buying with cash, it is critical that you know what you can qualify for in the way of a mortgage loan and it is critical that any seller you intend to make an offer to knows you are actually able to make good on that offer with bona fide mortgage financing!
You will notice on this page we have a link to daily, current interest rates at bankrate.com, so you can go there and see what average interest rates are for different types of products. We also have a link to their mortgage calculator so you can get an idea of what your principle and interest will be on any given loan amount. Please only use these a general reference tools and not as something exact. It is important that you work with a mortgage lender that will actually take all your credit/income/assets information and who will get you fully pre-qualified. That lender will be able to give you more exact figures, including taxes, insurance and any mortgage insurance that may be required on your loan. Talk to Scott Larsen and he, knowing the basics of your credit and financial situation, can direct you toward two or three good lenders that know this market, who can get you Pre-Qualified!
A Conventional Loan is less concerned with the condition of the home and will be your best route, usually, if you have 20% to put down on the purchase. Sometimes, if you have 10% or 15% Down Payment, Conventional is the way to go as well. It depends on each situation and especially depends on the quality of your credit. Conventional Loans are very highly driven in pricing by your FICO Score! A Score of 640 is going to pay a higher interest rate than one of 740 and the difference can be rather substantial.
For purchasing an existing home, an FHA Loan is by far and away the most used product in Malad City proper. It only requires 3.5% Down Payment and the interest rate is usually quite low and is affected very little by your credit score, although a low score can trigger a small upward change in rate. It’s rarely anything to get excited about and rarely ruins a deal. The 3.5% Down Payment does not have to be your own money either. It can be gifted to you by a relative, so for first time homebuyers, FHA seems to be a great option.
Rural Development and VA Loans
For financing without any down payment required, there is the USDA’s Rural Development Loan and a VA Loan, if you are a Veteran of the Armed Services. Every part of Oneida County qualifies for USDA RD Financing and this loan is the best loan for the average first time home buyer, in Scott Larsen’s opinion! You need ZERO money down and you can actually walk into a new home without a dime out of your pocket when the closing is finalized. VA Loans are the same way. They both are very similar in requirements, except that RD only allows the borrower’s household to have so much annual income, where VA is not restrictive in that way.
Most people don’t know this… a 580 Credit Score can sometimes qualify for an FHA Mortgage Loan! A 600 Score can qualify in many cases and a 620 and up is usually good to go! Having said that, you need to know which lenders to go to in order to find one that will bank your mortgage loan with the lower credit score. Scott Larsen can give you suggestions! Obviously, if you have great credit, your opportunities are much broader and the likelihood of getting financed is much greater as well. There are some great lenders who will work hard to make your loan happen.
The mortgage industry is, at best, very difficult to work with for the average buyer/borrower and that’s because unbelievable regulatory burdens have been placed on all the participants in the industry at every level. It doesn’t matter if you have great credit or poor credit. It is possible that you will have a very unpleasant experience, not because the lender you choose to work with will be terrible, but more likely because the underwriting requirements the lender must comply with will seem like they have singled YOU out in order to try to make the transaction as difficult as possible! So, what may seem that way, really isn’t that way at all! In most cases, with few exceptions, your lender is trying to find and pursue the best way to make your loan happen and the best thing you can do is, rather than complain, be attentive to their requests and comply without complaining! That is always your best option. Work as a “partner” with your Loan Originator and the Processor.
If you work with Scott Larsen as your agent, Scott will give you good, solid advice on how to proceed and on how to deal with your lender, no matter what lender you choose to work with. Scott will also recommend to you two or three lenders to reach out to, based on the information you and Scott discuss at the outset. Scott was in the mortgage industry as a Processor, Loan Originator, Broker and President of a mortgage company that operated in 9 states! If anybody knows this side of the real estate world, it is Scott!