Financing Your Home
Mortgage rates continue to be near record lows but low inventory is causing price increases and the return of multiple offers. Getting pre-approved for financing is the first step to getting in to a new home. And that means figuring out how much you can afford and how much a lender will give you. You can use my mortgage calculator to get an idea, but before you run out and look for your dream home it is best to talk with a mortgage broker.
Loans also come in lots of different types. Conventional mortgages are the most common, and are not guaranteed by any government organization. Conventional mortgages are usually available in 20%, 10% and even 5% and 3% down payment loans. Typically a Conventional loan will not allow the seller to contribute more than 3% of the cost of the home toward the buyer’s closing costs (called seller’s assist). On the other hand, FHA loans are government guaranteed loans and allow buyer’s to put as little as 3.5% down and ask for up to 6% of the cost of the home towards the buyer’s closing costs. While the overall money to close tends to be less, the fees associated with FHA loans are more. Conventional and FHA are just two of the most popular type of loans, there are many more.VA loans for Veterans, USDA for homes in rural areas, PHFA loans for PA residents with first time homebuyer assistance, Doctors, teachers and other profession focused loans, Rehab loans for homes in need of work, URA Rehab loans for buyers in the city of Pittsb and FHA 203K loans, a FHA version of the Rehab loan. Talking with a lender is the best way to find the loan that will meet your needs for monthly payment, overall cost and the amount of money you need to bring to closing.
The companies listed below have done a good job for my clients in the past, I hope you will consider them when shopping for a loan.
A quick note about online lenders: Online companies may offer good looking rates, but closings can be complex and personal service is important to making your transaction a smooth one. A local lender and settlement company will provide better service than a faceless company in cyberspace, and they frequently can offer better rates too. I have seen many deals go bad from poorly prepared online lenders, even the big name ones. Pre-approval letters from known local lenders are frequently better received by sellers, and seller’s agents, than the lenders from the internet.