28 Apr 2014

An unconventional approach to home mortgage

4.28.14 MortgageWhile buyers are active once again in the marketplace, many are not carrying a large purse or wallet. Most buyers who are shopping for a home today are looking to get in without a large down payment.

Traditionally, these buyers would consider a government loan, either FHA, USDA or VA financing. While these are great options for some buyers, these types of loans have income limits or property requirements, or are only available to those who have served or are currently serving in the Armed Forces (VA).

A more unconventional option for today’s buyer is conventional financing. This type of financing is available through FNMA and Freddie Mac and allows loans up to $417,000 in loan amount. While this was once a more stringent loan, today’s conventional loan has more flexible requirements. Conventional financing can now be obtained with just a 5 percent down payment, which may be received as a gift from a family member. At one time, down payment gifts were reserved for FHA financing only, but now conventional loans also allow gift funds for the down payment.

One caveat of conventional financing: when you put down less than 20 percent, you are required to obtain and pay private mortgage insurance in additional to your monthly mortgage payment. This cost however, is minimal and preferable to many buyers vs. saving for a larger down payment. A FHA or USDA loan also requires monthly mortgage insurance premiums.

One size loan does not fit all home buyers. FHA, USDA, VA and conventional financing are all excellent loan options, and your Allen Tate Mortgage Consultant will be happy to discuss them with you.

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By: Lisa Green (Vice President of Loan Origination)

Allen Tate Mortgage NMLS# 79543

Loans available in NC/SC

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