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EXISTING HOME OWNERS

Times and circumstances change, and for reasons good or bad you find your house is either too big for you now or if you're family is growing you find your current house is too small. If you are considering selling your current home or considering buying a new home please let me help.
 

RENTING OR FIRST TIME HOME BUYER


If you are now renting or a first time home buyer there are several options to get you in a new home and more than likely you would  pay less for a house payment then you now pay for rent. There are several benefits to owning your own home as opposed to renting. Taxes are the first thing that comes to mind. You can deduct most of your closing costs and fees the year you purchase. The interest you would be paying on the home loan would be tax deductible as would the property taxes and by consulting a CPA they would be able to tell you what else you would be able to deduct. Owning your own home has numerous benefits besides taxes. Privacy is a big one you do not enjoy by renting. You have the option to remodel your yard or home as you please as long as it doesn't violate the existing codes for your area.


THE DIFFERENCE BETWEEN A CONVENTIONAL, FHA, AND VA LOAN

If you are looking for a home mortgage, be sure to understand the difference between a Conventional, FHA, and VA loan.


CONVENTIONAL LOANS

When you apply for a home loan, you can apply for a government-backed loan (such as a FHA or VA loan) or a conventional loan, which is not insured or guaranteed by the federal government. This means that, unlike federally insured loans, conventional loans carry no guarantees for the lender if you fail to repay the loan.

For this reason, if you make less than a 20% down payment on the property, you’ll have to pay for private mortgage insurance (PMI) when you get a conventional loan. If you default on the loan, the mortgage insurance company makes sure the lender is paid in full.

Conventional mortgage loans must adhere to guidelines set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and are available to everyone, but they are more difficult to qualify for than VA and FHA loans. (Since there is no government insurance, conventional loans pose a higher risk for lenders so credit and income requirements are stricter than for FHA and VA mortgages).

Generally, you can get a conventional loan if you:

1.   have good credit
2.   have a steady income, and
3.   can afford the down payment.


FHA LOANS


An FHA loan is a loan insured by the Federal Housing Administration (FHA). If you default on the loan, the FHA will repay the bank's loss.

Since the loan is insured, the lender can offer you good terms including:

1.   a low down payment (as low as 3.5% of the purchase price)
2.   the financing of some closing costs (included in the loan amount), and
3.   low closing costs.

This type of loan is often easier to qualify for than a conventional mortgage and anyone can apply. However, FHA loans have a maximum loan limit that varies depending on the average cost of housing in a given region.

(Learn more about FHA loan limits at www.fha.com. Click on “2014 FHA Limits.”)

Also, you’ll have to pay MIP (mortgage insurance premium) as part of an FHA loan. (Conventional mortgages have PMI and FHA loans have MIP.) The premiums that borrowers pay contribute to the Mutual Mortgage Insurance Fund. FHA draws from this fund to pay lenders' claims when borrowers default.


VA LOANS

 
A VA loan is a loan guaranteed by the Veterans Administration (VA). This type of loan is only available to certain borrowers through VA-approved lenders. (The guarantee means that the lender is protected against loss if the borrower fails to repay the loan.)

To get a VA loan, you must be:

1.   a current member of the U.S. armed forces
2.   a veteran
3.   a reservist/national guard member, or
4.   an eligible surviving spouse.

(To learn the specific eligibility requirements for a VA loan, go to www.benefits.va.gov and click on “Home Loans,” then “Home Loans Home,” and “Eligibility.” Then click on "Learn more" under "Purchase Loans and Cash-Out Refinance.") VA mortgage loans can be guaranteed with no money down and there is no private mortgage insurance requirement.