Mortgage Updates

Finding the loan that is "right" for you and your family.  Tip Number 6 is that you should meet with a qualified lender to review program types BEFORE choosing a home.  It is important to know what type of loan and which program before going out shopping to avoid disappointment.

Essentially there are two types of loans; Conventional and Government.  From there they break down into sub categories.  The conventional loans fall under  Fannie Mae, Freddie Mac and RFC (Jumbo) guidelines.  Government loan categories include; FHA, VA, CalVET and USDA.  These programs all have different types of mortgage insurance for loans with down payments of less than 20%.  Conventional loans work with private mortgage insurance companies, government loans utilize government mortgage insurance (FHA) VA guarantee Fee; USDA government Mortgage insurance, CalVET - Guarantee Fee.

Each of these loans has different requirements.  Some, such as USDA, have geographical restrictions.  The loans also have varying property requirements.  For these reasons alone it is critical that a buyer knows which type of loan before house hunting since some properties may be excluded due to condition or location.

It is therefore wise to know which loan works best for you and your family... then have a "back up" loan or program that would work IF your primary loan is not an option.  But, if as a first time buyer you really have only one option... say 100% VA financing, then you would want clear communication between your lender and your Realtor about the property types and specific nuances requiring upfront negotiation for your home purchase to become a reality.