Getting a Regular Mortgage loan

Once you get help with the Down Payment and/or the Loan or both you still need to

get a regular Loan. Loans are not the same even with the same Lender. That sounds

confusing and it is confusing. Example if I apply for a Loan directly with one of the big

Box Lenders vs. going to a Mortgage Broker who represents several lenders including

the Box Lender I will get a better rate from the Mortgage Broker who represents the

Big Box lender than I will get from going directly to the Big Box Lender. Why, the big

Box lender now has several thousand small mortgage brokers selling his product for

them. Word to the Wise, never go direct. If you do, do a comparison.

When you get a Loan on your House the Payment itself on a conventional loan will

include the Principal and the Interest. One of the reasons we get a conventional loan

is to get the tax write offs. If your Mortgage Payment was $ 5,000 a month, that could

mean you have paid over $ 35,000 in interest on your Mortgage payments over the last year; by doing this you can lower tax bracket allowing you to keep more of the

money you make. Check out this sample Mortgage Statement that you will receive

each year. It shows what you will be able to write off.

1) Conventional Loan

If you have good credit, say over a 620 FICO Score, you have to have 20% to put down, this avoids PMI. If you have less than 20% Down and you are getting a conventional loan you will have to pay PMI. You have to have enough income to afford the Principal, Interest, Taxes, and Insurance.

2) FHA Loan

 If you have credit over 620, and you have less than 20% to put down, and You have a job or are self-employed and can afford the Principal, Interest, Taxes, and Insurance.. you probably want to get an FHA Loan. Any House you buy and put less than 20% down you will have to pay Private Mortgage Insurance. Once your Home has 20% of Equity you can ask the Lender to waive the PMI. PMI could add another $ 200.00 to $ 400.00 to your Mortgage Payment each month. 

Its worth it though because of everything we have mentioned so far.

3)  V.A. Loan

If you are Veteran or a disabled Veteran and your credit is over 620 you are not required to put anything down; Zero Down and no PMI. As long as you have some type of Income and can afford the Principal, Interest, Taxes and Insurance your best bet is to get a V.A. Loan. If you are a Disabled Veteran you also get the benefit of paying very little on your closing fees. Another great thing about VA Loans is if the Feds decrease the interest rate and you have a V.A. Loan the lender can reduce your interest rate on you V.A. loan, almost automatically . Whereas with a conventional or FHA loan you would have to apply for a whole new loan. Example if you get a V.A. loan at 6% and the Fed rates drop to 4.4% than the V.A. lender can lower your interest rate without having to refinance your loan at no cost to you and it stays fixed at the lower rate.

4) Hard Money Loan

What are the main factors for getting a Low Interest rate loan; Credit Score, Income and Savings. If you are missing one of these items you might only qualify for a hard money loan. There are points you might have to pay and your interest rate could be 10% or more; the client has to know they will be able to afford to make the payments or you have to know that buying this particular property is well worth the investment and the risk. Some people are willing to do this on Investment Properties. I am one of them.