When buying a home, the majority of buyers – first-time, move-up, and investor buyers – require financing. At Correia & Company, we do not provide loan interest rate quotes or loan details. We do, however, keep on top of the variety of different loan products available for home buyers. Here are just some of the home loan products available to home buyers:
FHA loans - Available to buyers who plan on occupying the home that they end up buying. This is a favorite loan product for many first time home buyers as it requires a minimum down payment of 3.5% and is more flexible with buyers with poor credit. FHA is however extremely strict as to the condition of the property, and thus many homes on the market today are not eligible for an FHA loan. An FHA loan can be used to purchase either a single family home or a residential multiunit property (2-4 units).
FHA Rehab (203k) loans - Many homes these days are physically distressed and require some repairs before someone can move in. The purchase of this home AND the repairs can be financed using an FHA 203k (Rehab) loan. The drawback is that there is a considerably higher interest rate as opposed to a regular FHA loan.
VA loans – These loans are only available to veterans, members of the military, or surviving spouse of a veteran. They offer a number of benefits to the borrower, most importantly being the fact that no down payment is required.
Conventional loans - These are a very common loan which typically requires a higher down payment than FHA – typically 5-20% (or more – depending on the lender’s guidelines). These loans will usually have a better interest rate and lower fees than FHA, but their borrower guidelines are stricter.
HomePath - This is a loan product specifically for use in the purchase of a Fannie Mae foreclosure. This loan has a low down payment (as low as 3%) and can be used by owner-occupied buyers AND non-owner-occupied buyers (example: investors, second homes). There is also no fee for an appraisal and no mortgage insurance.
These are just a small handful of some of the most common loan products out there – there are hundreds more!