Hello Everyone This is Brad Hammarlund with Exit Homevets Realty in Killeen TX. I work with people looking to sale their homes and also with people who are looking for homes for sale in Killeen TX, homes for sale in Copperas Cove TX, homes for sale in Harker Heights TX.
With
our government going deeper and deeper in debt are they still going to
back mortgages? There has been a lot of debate on the issue and
President Obama has recently came out and said that he is going to start
limiting the amount of federally backed loans in the future and that
the private mortgage industry is going to have to take more risks. For
those who do not know there are 3 main loan types available to home
buyers, VA, FHA, and Conventional loans.
The VA loans are loans
backed by the Veterans Administration and only those who served are
eligible for this benefit. These loans will allow the purchaser to
finance 100% of the loan, so they re not required to have a down
payment. Along with that they are not required to carry mortgage
insurance on the loan, and they have the best interest rates of the 3
kinds of loans so they will have a lower monthly payment than the other
types of loans. Their main requirements are fist to be eligable, you
will need a minimum credit score of 620 and a debt to income ratio of
45% or better.
The FHA Loan is a loan
backed by Federal Housing Administration. There a lots of different
loans that fall under the FHA. The majority of these loans you will be
required to have a minimum of 3.5% down, and you will be required to
carry mortgage insurance till you pay down the loan to the point you
have 20% equity in your home. They normally have lower interest rate
than a conventional loan. They offer programs from everything from first
time home buyers to investors looking to purchase a home and finance
the repairs. Their main requirement are credit scores above 635 there
are sub prime products available to people with lower scores but they
will have higher interest rates.
The Conventional loan is just that a
normal bank loan. The Conventional loans are great for anyone who can
not qualify for a government backed loan or if the house does not
qualify to be financed by a government backed loan. These are used by
home buyer and investors, they normally require anywhere from 5% down
for an owner occupant to 20% down for an investor. They do require you
to have mortgage insurance till you reach 20% equity in your home. These
loans have less stringent requirements when it come to the property
they are based strongly on your credit and ability to pay back the loan.
Their main requirement are credit scores 640 or better and the rest
depend on the bank and their underwriters. The interest rates can vary
so you need to shop around.
Now that you know a little about
the different type of loans what will happen when the FHA stops backing
mortgages and you want to buy a home? You are going to have to have fair
to good credit, you are going to be required to have more money to
put down, plus you will have a higher interest rate. So if you are
thinking about buying now is the time while interest rates are still low
and you have the ability to still get a government backed loan. This
increases your money's purchasing power and allows you to get more of a
home for a low monthly payment. Stop and think less than 3 month ago the
average interest rate was 3% now it is over 4% this results on average
to around a hundred dollars more a month on the same home purchase just
due to the increased amount going to interest.
Homes for sale in the Killeen Fort Hood Area: Brad Hammarlund, Realtor, with Exit Homevets Realty in Killeen TX, Our main service area is Nolanville TX, Harker Heights TX, Killeen TX, Copperas Cove TX, Kempner TX, and Lampasas TX.
At Exit Homevets Realty We are Real Estate Expert Advisers And
Marketing Innovators. I am here to assist you with all of your real
estate needs. Feel free to call or text anytime: (254) 291-0630
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