Financing

Many people who are considering buying their first home can be overwhelmed by the myriad of financing options available. Fortunately, by taking the time to research the basics of property financing, homeowners can save a significant amount of time and money. Having some knowledge of the specific market where the property is located and whether it provides incentives to lenders may mean added financial perks for buyers. Buyers should also take a look at their own finances to ensure they are getting the mortgage that best suits their needs. Read on to find out which financing option may be right for you.   If you are shopping for a mortgage loan, try contacting:

Alexia Barmaki, 678-858-4629 @ LoanSouth Mortgage, abarmaki@loansouth.com

Cindy Meade, 678-794-7004 @ Northpoint Mortgage, cindym@fairwaymc.com

Monica Badircu NMLS #625149, 404-272-6396 @ Chase Mortgage, monica.badircu@chase.com

Loan Types
There are several mortgage loan types; these are differentiated by loan structure and the agencies that secure them.

  1. Conventional Loans
    Conventional loans are fixed-rate mortgages that are not insured or guaranteed by the federal government.

  2. FHA Loans
    The Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development, provides various mortgage loan programs. An FHA loan has lower down payment requirements and is easier to qualify for than a conventional loan. FHA loans are excellent for first-time home buyers because in addition to lower upfront loan costs and looser credit requirements, they allow down payments of as low as 3%. FHA loans cannot exceed the statutory limit.

  3. VA Loans
    The U.S. Department of Veterans Affairs (VA) guarantees VA loans. The VA does not make loans itself, but guarantees mortgages made by qualified lenders. These guarantees allow veterans and service people to obtain home loans with favorable terms, usually without a down payment, and in most cases they are easier to qualify for than conventional loans.


Equity and Income Requirements
The pricing of home mortgage loans is determined by the lender in two ways, each of which determines the creditworthiness of the borrower. In addition to checking the borrower's FICO score from the three major credit bureaus, lenders will require information to determine two standard statistics, which are used to set the rate charged on the loan. These two statistics are the loan to value ratio (LTV) and the debt-service credit ratio (DSCR).