Purchase
Looking to purchase a home?
You came to the right place
Whether you're a first time homebuyer or experienced home owner, we'll help you find the funding option that fits your needs.
Types of Purchase Loans
When it comes to purchasing a home, it is essential to understand the various loan options available is crucial. Each type of mortgage has its own set of requirements, benefits, and drawbacks. Here’s a breakdown of some common loan options, including FHA, VA, USDA, conventional loans, bank statement loans, jumbo loans, and those suited for self-employed individuals.
If you feel overwhelmed with the terminology and types, remember that's what we're here for! With a brief conversation we can help you narrow down what you qualify for.
1. FHA Loans
- Overview: Backed by the Federal Housing Administration, designed for low to moderate-income borrowers.
- Down Payment: As low as 3.5%.
- Credit Score: Minimum around 580 for favorable rates; some lenders accept lower scores.
- Pros: Lower down payment and more lenient credit requirements.
- Cons: Requires mortgage insurance, which increases costs.
2. VA Loans
- Overview: Available to veterans, active-duty service members, and certain reservists, guaranteed by the Department of Veterans Affairs.
- Down Payment: Typically no down payment required.
- Credit Score: No minimum score, but generally preferred above 620.
- Pros: No mortgage insurance and competitive interest rates.
- Cons: Limited to eligible military personnel.
3. USDA Loans
- Overview: Designed to promote homeownership in rural areas, backed by the U.S. Department of Agriculture.
- Down Payment: No down payment required.
- Credit Score: Minimum around 640.
- Pros: Low mortgage insurance costs and no down payment.
- Cons: Geographic and income restrictions apply.
4. Conventional Loans
- Overview: Not government-backed; can be conforming (meets Fannie Mae/Freddie Mac standards) or non-conforming.
- Down Payment: Typically 5-20% (as low as 3% for first-time buyers).
- Credit Score: Generally requires a score of 620 or higher.
- Pros: More flexible terms and potentially lower overall costs.
- Cons: Stricter credit and income requirements.
5. Bank Statement Loans
- Overview: Designed for self-employed borrowers who may not have traditional income documentation.
- Down Payment: Usually requires 10-20%.
- Credit Score: Varies, often needs to be higher.
- Pros: Flexible income verification based on bank statements.
- Cons: Higher interest rates and down payments.
6. Jumbo Loans
- Overview: Loans that are higher than conventional guidelins allow, usually over $766,550
- Down Payment: May require 10-20%+.
- Credit Score: Varies, often needs to be 700+ or higher.
- Pros: Can have lower interest rates, allow for large loan amounts
- Cons: Typically stricter guidelinrd and underwriting requirements
7. Loans for Self-Employed Individuals
- Overview: Tailored options for freelancers and business owners, allowing various documentation methods.
- Down Payment: Typically requires 10-20%.
- Credit Score: Generally around 620 or higher.
- Pros: Flexibility in income verification.
- Cons: May involve higher costs and stricter requirements.
These options cater to different financial situations, so it's essential to assess your needs and consult a mortgage professional to find the best fit
What's the Loan Process Like?
Though each situation is unique, check out the typical flow of a loan from research to funding.
Inquiry
Research & Initial Call
You decide you want to purchase a home. The options are endless! A brief call with us can help us understand what you need and help you narrow down what you qualify for.
Credit Check
Depending on the loan, a credit check may be required to ensure you qualify.
PreApproval
To assist you as you put in offers, wc can issue a preapproval for an approximate loan amount you qualify for based on the information you provide.
Application
Complete Application
Once you have a purchase contract accepted, you complete an official application and the real timeline starts!
Gather Documentation
We'll request some initial documentation, such as ID, proof of assets, proof of employment, etc.
Initial Underwriting Review
We submit your loan and preliminary documents to underwriting to be reviewed.
Underwriting
Conditional Approval
After reviewing initial documents, underwriter issues conditional approval and lists the conditions/documents still needed. We'll then request the additional documentation from you or any other responsible parties.
3rd Parties: Title, Appraisal, Insurance
If needed, we'll request a title report, order an appraisal, and ensure insurance is in place.
Clear to Close
Once all requested documenation is in and all conditions are satisfied, the UW will issue Clear to Close! This means we have the green light.
Closing
Closing
Once clear to close is issued, we'll schedule the time/date of closing, at which you will sign the loan documents.
Funding
Once all closing docs are received and in order, the funds for the loan will be wired from the lender. The seller gets their money, and you get your home!
Frequently Asked Questions
Have a question not listed? Check out our Learn page or reach out to us with one of the options below!
How does the process work?
The process depends on the type of loan and program you are doing. But in general:
- Consultation and Application
- Processing and Initial UW - Gathering documentation and requesting 3rd party items (appraisal, title, insurance) as needed
- Loan Approval and Clear to Close
- Closing and Funding
We process in-house in order to deliver the quickest turn times. We have closed loans as quickly as 5 business days, although average is closer to 2-3 weeks and depends on the type of loan. The quicker you can provide us the documentation needed, the quicker we close the loan. For a more thorough timeline, check out our purchase and refinance pages.
Why use a broker rather than a lender directly?
While lenders are locked into one set of rates and guidelines, a mortgage broker can compare options across multiple lenders, ensuring you get the best rate and deal for your needs.
Not often known, brokers also get wholesale pricing, which means they can even get you a lower rate from the same lender than you would get going to the lender directly!
We originate and process the loan directly, and the lender handles the UW, closing and funding of the loan.
What credit score do I need?
Certainly a higher score puts you in a better position to receive a better rate and terms from lenders, but most conventional loans can go as low as 620 and FHA and VA loans can be seen as low as 550 (lower in some scenarios).
How much of a down payment do I need?
It depends on the loan type. Conventional loans typically require 3% for first time homebuyers, and 5-20% otherwise, FHA loans require as little as 3.5% (Certain loan programs now allow 0% down for Conventional and FHA depending on income). VA and USDA loans can offer 0% down for qualified borrowers. Putting 20% down removes the monthly mortgage insurance which is an additional monthly charge on Conventional loans and a charge on all FHA loans.
What kind of loan products do you offer?
We work with over 100 lenders providing loan products for almost every scenario possible when it comes to residential properties. This includes 15 and 30yr conventional loans, VA, FHA, DSCR, Bank statement loans, HELOCS, Home Equity, Foriegn National, and more.
Contact us today!
We are happy to answer any questions you may have regarding mortgage loans and provide you with competitive rates tailored to your unique financial situation.
