Home Loans 101 ~ Purchases

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Mortgage and Lending with The Mortgage Market of Delaware

Home Loans 101 – Purchases -

Home loans may seem intimidating but are actually quite simple. There are several types of loans. The type you choose would depend on a few things. You may even qualify for several but one may be better suited for your particular situation.

If you are a Veteran or Active Duty Military the obvious choice is the VA Home Loan. It allows for no down payment, no monthly mortgage insurance and the seller of the home can pay all of the buyers’ closing costs.

If you are a first time home buyer or at least won’t own another home by the time you go to closing, you can choose the USDA 100% Guaranteed Rural Housing Home Loan. This loan allows for no down payment, a low monthly mortgage insurance payment and the seller can pay all of the buyers’ closing costs. There are some income limits but they are substantial amounts.

If you happen to have a low credit score or earn more the USDA allows, you may decide to go with FHA. There is a 3.5% down payment but this amount can be gifted by a relative. The seller can pay all of the buyers’ closing costs and the guidelines on this loan product allow higher debt to income ratios.

If you have at least 3% down payment, you can go with a Conventional loan. Any down payment less than 20% will require monthly mortgage insurance. These amounts differ according to credit score and percentage of down payment. And, seller’s assistance with closing costs differs depending on the percentage of down payment.

Here are a few examples for your review and reference. All are based on a purchase price of $170,000.

VA Home Loan with at least 10% military disability income- $763 principal and interest, $60 for home owners insurance and $90 for property taxes= $913.38 total housing payment.

USDA 100% Guaranteed Rural Housing Home Loan - $734.69 principal and interest, $72.27 mortgage insurance, $60 home owners insurance and $90 for taxes = $1001.22 total housing  payment.

FHA with 3.5% down- $749.55 principal and interest, $118.23 mortgage insurance, $60 home owners insurance and $90 for taxes = $1017.78 total housing payment.

A quick search for homes in this price range shows a large availability. Plus, interest rates continue to be very affordable. If you have any questions about how the home buying process works and to find out how much home you qualify for, contact a trusted mortgage professional. It’s a lot easier than it seems.

 

Written by:  JoAnn Moore, Licensed Mortgage Professional, NMLS #165477, Owner and President of The Mortgage Market of Delaware, Georgetown, Delaware. Office 302.855.1306, Cell 302.236.1229, MMODJoAnn@aol.com            

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JoAnn Moore

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Re-Blogged By Re-Blogged At
  1. Mary Yonkers 10/15/2015 12:29 AM
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Rainmaker
4,210,863
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

JoAnn, you do an excellent job of pinpointing different loan programs available to buyers depending on their needs! 

May 19, 2015 12:44 PM #1
Rainmaker
446,579
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Thank you so very much, Joan. I appreciate your kind words. 

May 20, 2015 12:01 AM #2
Ambassador
2,911,494
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

So many types of loans out there.  Rarely do I work with buyers that go outside the conventional market (I sell many second homes), but I keep myself familiar with who offers what products just in case. 

May 22, 2015 12:12 PM #3
Rainmaker
1,229,086
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

JoAnn Moore Thanks for keeping us informed about the basic loan programs.  I hope to see more of your post soon. 

Oct 15, 2015 12:22 AM #4
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Rainmaker
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JoAnn Moore

Home Loans in Delaware
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