How much home can you afford? Use our finance center to learn about your loan options below. There are several loan programs available, and depending on your credit history, there is bound to be one that is perfect for you. Here are a few examples of the most popular programs offered today:
ZERO DOWN LOANS
With the current mortgage situation, virtually all lenders have suspended these loans, which were commonly called the 80/20, 80/15/5, 80/10/10, etc. The best option for obtaining a low down-payment loan is to consider FHA. 3 1/2% down is common for many borrowers. The seller is often allowed to contribute up to 6% of your closing costs. A downside of this type of loan is that the FHA insurance stays in place as part of the loan payment for the life of the loan, unless you put 10% down. In a Conventional loan, this requirement is removed after 78% equity is achieved. See below.
FHA AND VA LOANS
The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low downpayments, which typically run around 3.5 percent, and have relatively easy requirements. FHA mortgages have less stringent income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!
In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!
ADJUSTABLE RATE LOANS
With a fixed-rate mortgage, the interest rate stays the same for the life of the loan. But with an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.
FIND THE IDEAL LOAN FOR YOU!
Let us help you find the program that’s right for you. Call Curt for references to local lenders who are familiar with the Pittsburgh market.