Financing

Financing

Financing 

How much home can you afford?  What types of loans are available?  There are several different types of loans and one will be the best fit for you and your situation.  Below are the most common types of loans in our area.

Most of the loans discussed below are fixed rate mortgages.  What does that mean?  A fixed rate mortgage means you borrow the money at a fixed interest rate for the life of the loan (anywhere from 15-30 years).  You pay the same amount every month for the life of the loan for principal and interest.   However, during the course of your loan, your property taxes may increase or decrease and your home insurance may increase or decrease.  If this happens, your monthly payment will be adjusted accordingly.

Conventional Loan

Down payments for this type of loan range from 5-20% (or more depending on your situation) of the sales price.

Private Mortgage Insurance (PMI)

Unless you plan to put 20% down, you will need to have PMI. This insurance premium is paid monthly and is included in your monthly payment.  It protects the lender against loss due to foreclosure of the property. 

On a conventional loan, you can ask your lender to remove the PMI when you have achieved 20% difference between your loan and the value of the property.  This can be achieved by either paying down the mortgage and/or the property increasing in value.  This elimination does not happen automatically.  You must ask for the removal and in many cases provide an appraisal to support your claim. It is critical that you watch your loan balance in relation to your increased property value.  We are happy to provide free market evaluations to our clients so that they can evaluate how close they are to removing the PMI.

FHA

This is a loan insured by the Federal Housing Administration (FHA).  Loans must meet certain requirements but are generally easier to obtain than a conventional loan.  Minimum down payment is 3.5% of sales price (as of 2016).  Maximum loan amount is $271,050 (as of 2016- 2017 maximum’s may increase another 4k).  As with any loan, your credit/assets/debt/income will be checked in order to determine how much home you can afford. 

FHA loans require MIP (Mortgage Insurance Premium) since your down payment is less than 20%.  A portion of your MIP is included in your loan amount and another portion is paid monthly through your mortgage payment.

VA

Administered through the Department of Veterans Affairs.  This loan is available only to active duty military members or honorably discharged veterans or retirees.  This is a zero down payment loan.  One of the biggest advantages to this loan, in addition to the zero down payment, is the fact that there is no mortgage insurance.  However, the VA does charge a VA funding fee (will vary if first time purchasing or multiple purchases – can be waived under certain circumstances).  This fee will be added to the loan amount and financed over the course of the loan.

USDA

This type of loan is considered for “rural” areas only!  Some of our surrounding areas do qualify for this type of loan.  Down payment will vary from 0-3.5%.  Income qualifications are required.

Adjustable Rate Loans

Usually not used when interest rates are low.  Type of loan in which the rate will vary from year to year based on the bond market. 

Please note most loans will have certain requirements that the home must meet.  For example it would be extremely difficult to purchase a foreclosed home that is sold “as is” with any type of government loan (FHA or VA). 

Contact Information

Photo of Nanda de Laurentys Real Estate
Nanda de Laurentys
Blanchard & Calhoun Real Estate Co.
1202 Town Park Lane, Suite 201
Evans GA 30809-3476
(706) 399-2025
Fax: (706) 868-1011