SD Capital Funding’s
Conventional loans are ideal for someone who has a high credit score and lower debt to income ratio. Even though conventional loans have slightly tighter guidelines, a 20% down payment is not a requirement. Conventional loan interest rates are also extremely dependent upon credit score, down payment and property type.
FHA loans are ideal for someone who has less than perfect credit, a low down payment or higher debt to income ratio. FHA allows for more flexibility but also charges an insurance premium. The mortgage insurance premium which is charged at closing, known as the Upfront MIP or UFMIP, is 1.75% of the loan amount and can be added to your loan balance.
FHA 203(K) LOANS
FHA 203(k) loans are ideal from someone who is looking for a “fixer-upper”. FHA 203(k) loans allow for all rehab repair costs to be included in the loan amount. The program does require the work to be performed by a licensed general contractor and the use of a certified consultant. The closing timeline can take up to 6 months but up to 6 months of mortgage payments can also be added to the loan amount!
Is it a PUD, Condo or Single Family? Does it have an HOA? These acronyms may sound confusing but it is important to know what you are purchasing. Different property types have different monthly expenses and of course, can have different interest rates.
The lender with the lowest rate may not have access to the best product that suits your needs and helps you meet your goals. Lenders with ultra-low rates often skimp on service and have teams with little to no product knowledge. For most clients, it’s best to use a mortgage broker who accesses multiple lenders, multiple products and focused on serving your needs and goals!