Finance Options!

There are generally four different types of finance options when purchasing a home and if we simplify these things, we can compare them to Ford, Chevrolet, Toyota etc.

Before the tops are USDA FHA conventional and VA. USDA is a 100% loan. Most homes within Habersham and White County are located within a USDA eligible area. There are income limitations, credit score requirements and other certain things to determine your eligibility for a USDA loan. You can also roll your closing cost into the loan in order to decrease your out-of-pocket expense. So basically, you could purchase a house with zero money down and very little money out of pocket during the buying process.

FHA is a popular loan also when things do not fit in the other categories, we usually revert back to an FHA loan. It requires 3 1/2% down and those funds must be verified. It is fairly straightforward, and you can also roll your closing costs into the loan amount. VA loans are known as a veteran’s loan. People have the misconception that these loans are very difficult, and the appraisals are very picky. However, they remain very similar to the other types of loans. It is also 100% long; you must have your DD 214 in your certificate of eligibility in order to obtain this type of loan. This loan is considered the Cadillac among the different types of loans. It is certainly beneficial if it is the one that you can obtain.

Last conventional loans generally require a higher credit score, but they work and function the same as the others most of these loans are established with a payback for 15 years up to 30 years. Please don’t be fooled by lenders that advertise zero closing cost or first-time buyer incentive and things like that. These are merely marketing strategies and trust me they are not going to do something for free.

Another type of finance is seller finance. This is where the seller may elect to allow you to make payments directly to them. The seller actually becomes the bank. It does not give the seller rights to visit your property or to enter your property. However, if you fail to pay the seller would be able to foreclose on you just like the bank would. Seller finance is a great option when it’s available. Hard money lenders and soft money lenders are basically private individuals that utilize the strength of lending money in order to make money. These interest rates are generally 8 to 12%. There are certain applications where this strategy may be the only one that she would qualify for. They certainly have their place in the real estate market even though it is not the most desired loan. These are generally a bit more expensive but may enable you to accomplish your goals.

Leading Edge Real Estate