Tuesday, November 5, 2013


We all know that a major component in purchasing a home is getting a loan. What you may not know is that there are a variety of ways to do so.

First off is the where. You can go through your existing banks mortgage department, use a credit union or a private mortgage company. Most offer the same basic services that 90% of customers utilize, such as Conventional, FHA and VA loans. The interest rates and auxiliary fees may vary, but for the most part there isn't a huge difference in price and availability. Where you may see a difference is the level of customer service and contact provided by your mortgage advisor.

Second is the how. Depending on your current financial and credit standing, or veteran status you may be eligible for a variety of loan options, listed below.


A few quick notes, typical of loan options: (may vary by personal situation)

Conventional Loan: minimum of 20% down payment (to avoid paying mortgage insurance) / 80% LTV (loan to value) ratio.
Meaning that whatever the appraiser sets the value of the house at (which is independent and may vary from the asking or sale price), the lender will only fund up to 80% of that appraised value. You would need to make up the difference to the total sale price via a cash down payment.
There are also 'jumbo loans' which are loans over certain governmentally preset limits. $417,000 in most of the US and currently $625,500 in 'high-cost areas'. These loans can have slightly different down payment and LTV ratios as determined by the lender.

You can of course obtain a conventional loan for under 20% down, but most all lenders will require you pay and additional fee for mortgage insurance, up until you have payed down the balance owed to less that 80%.

FHA Loan: minimum of 3.5% down payment / $418,750 maximum loan amount.
Limitation of certain closing costs / amounts of costs, total loan value as well as certain housing types.
Typically requires a better credit history and score.
Requires FHA (Federal Housing Administration) mortgage insurance - cost is included into monthly loan payment.

VA Loan: 0% down payment / Limits of eligibility and usage.
Must be a Qualifying veteran of the US Military.
Can only use a certain, predetermined amount of 'entitlement' toward VA guarantee of loan repayment.
VA loans may be 'assumed' from you by another qualifying veteran who agrees to substitute their entitlement for yours, allowing you to qualify for a new VA loan.


As you can see there are quite a few options out there and even more mortgage advisors looking to help you. Below is a short list a few experienced professionals who can assist you or answer any additional questions you may have.

Peter Wease - Alpine Mortgage

Brian Billups - Bay Equity Home Loans

Jami Alarja - Bay Equity Home Loans

One final note: Don't be afraid to give them a call just to find out where you stand. Many of us are not in the position to buy a home right this second, but without certain information and help you may never know how to get where you want to be. The sooner you find out at which step on the path you stand, the sooner you can take those further steps you want to take.

The best of luck!


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