How to Mortgage a Home
When considering buying your first home you may be overwhelmed by all of the financing options available to you. By taking the time to research property locations, taxes, financing options, etc... could save you lots of time and money in the long run. Knowledge is power. Use the internet to do as much research as you possible can to be properly prepared. Getting ready to mortgage the home of your dreams is a big decision and you want to clean house on your personal finances and credit. Evaluate yourself financially. Take a good look at your credit report and bank statements. Look at your spending history. Make sure you have a stable job and that you are financially secure and that you will be able to remain that way throughtout the term of the mortgage. What items can you cut down on or budget in order to guarantee your going to make your mortgage payment on time every month. Once you feel that you are personally ready to take that big step it’s time to do the research and educate yourself on the mortgage process. Here are the major programs to look into:
Fannie Mae (Conventional) Loans now run by (FHFA) Federal Housing Finance Agency better known as "The Government"
Fannie Mae Conventional loans are fixed-rate mortgages or adjustable rate mortgages (ARM) that are not guaranteed by the federal government. Although they are the most difficult to qualify. They prefer larger down payment, higher credit scores and 2 year income stability plus add certain costs, such as private mortgage insurance (PMI). Conventional loans are considered conforming loans and comply with guidelines set forth by Fannie Mae or Freddie Mac.
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac is a public government sponsored enterprise (GSE), headquartered in the Tyson's Corner in unincorporated Fairfax County, Virginia.
FHA Loans
Federal Housing Administration (FHA), or theU.S. Department of Housing and Urban Development, also provides mortgage loan programs. An FHA loan requires only 3% down and is easier to qualify for . FHA loans are the best option for first-time home buyers because they hav e looser credit requirements.
VA Loans
Veterans Affairs (VA) is a loan strictly for Veterans and Service men and woman. The Veteran Affairs guarantees VA loans. The VA guarantees mortgages made by lenders. These guarantees allow individuals to obtain home loans without a down payment, and they are easier to qualify for than conventional loans.
USDA
The USDA (United States Department of Agriculture) home loan program also guarantee’s home loans in rural areas and developments only. To find out if your property is eligible you may find out on the “http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do” website. This program does not require a downpayment and the underwriting guidelines are less stringent the conventional financing. However it does have income limitations depending on the location of the rural property. Depending on your income criteria and the income limitations set forth by USDA will determine what type of USDA program you will qualify for.
