Breaking down the differences between conventional, fha, sonyma, and va loans. Showing the different ways each loan effects a buyer
Hey guys kia home stephen king with realty connect usa here to give you an explanation on the differences between conventional sonia fha and va loans many of you may have heard of these financing terms before but have no clue what they mean or how they affect you when purchasing the home we’re going to be breaking it down that way you can better understand your
Options so let’s start with conventional financing you have a fire and a bank and that’s it this is the cleanest type of financing there is without it being an all-cash deal conventional financing is not only the quickest and simplest mortgage but it is the most lenient when it comes to the condition of the property you’re purchasing and whether or not that property
Has all the proper seals so if you’re purchasing a home perhaps with a finished basement or let’s say a seller add in an additional bathroom here an extra bathroom there without getting the proper permits for the improvements they made and you as the buyer are okay with dcos missing most conventional lenders will not care about it either and they will issue you
Alone without hesitation sellers prefer this financing because there are less groups for the buyer to jump through and there are less restrictions for the house itself which makes the loan process cleaner and creates less of a chance for a problem to surface and perhaps kill a deal and this is why sellers prefer to accept offers with conventional financing next
You have what’s called fha or sony may loans basically these loans you have a buyer a bank and then a government entity overseeing the whole process sony may is a loan backed by the state of new york whereas fha is a loan back federal government these two programs i find our most synonymous with first-time homebuyers the reason being is they can be more forgiving
When it comes to buyer qualifications because they’re backed by government entities so if you’re carrying higher guests have a lower credit score maybe less cash to work with or you’re new in your career and your income isn’t as high just yet these programs are designed to help assist buyers maybe just starting out they can also be great for buyers by providing
Downpayment assistance guys these are great loan products i have many buyers who take advantage of what these loans offer them they can be very forgiving and how they qualify a buyer however it does come with some trade-offs now majority of the risk in these loans lie on whether or not the property you’re purchasing qualifies so here not only does the buyer have to
Qualify that the property has to be in the condition that that government entity wants it to be in otherwise they will not lend money on it so for example these loans will require that the home owner obtain any missing cio’s installed handrails on stairs porches decks along with other requirements that these entities these government entities feel necessary when
An appraiser comes in on an fha or souleymane loan they’re looking to make sure that the houses up to the government’s standard if the house is run down there may be paper requirements roof repair requirements along with a couple of other things that they may point out and these can potentially create higher expenses make for a longer sales process and ultimately
Pose more risk to a seller than a buyer now with that being said these programs can make homeownership much more obtainable the first-time homebuyers and they’re great programs for buyers who are just starting out the key to making sure you don’t waste time on a property that won’t qualify for fha or sodium a financing is relying on your realtor to know what to
Look for last but not least you have your va loans and if you are veteran or active-duty thank you thank you thank you for your service a va loan is another long program where you have a buyer a bank and a government entity setting the requirements now these loans are designed to allow veterans and service families to purchase real estate with no money down and no
Pmi they may also allow the buyer to money against a home as well these loans do incredible things for the men and women who served to protect our country the key thing to keep in mind when factoring the risks is that the loan process and order of operations for these loans are slightly different than others similar to fha and stone in their requirements but the
Appraisal is done much later in the deal which means if there is going to be an appraisal issue you may be waiting a little bit longer to find that out so the process of finalizing these mortgages can take slightly longer but i find that the key to these loans is having a lender and loan officer whom are both experienced in issuing these this is another program
That can be a great option for the borrower so make sure you have a realtor you can rely on to guide you through the process so if you have any questions about any of these programs or you’re looking to learn whether or not you qualify or if so how much for and if not what you need to be doing to put yourself in the position to purchase give me a call i will make
Sure you speak to the best banker for your situation my bankers will make sure that you are preparing properly if you think you are a year or so away from purchasing right now is the time to speak with a banker and start preparing the last thing you want to do is work diligently for a year preparing your finances only to find out that you prepared them the wrong
Way investing 15 minutes and speaking with a banker can ensure you’re preparing the right way we could save you a year’s worth of time so i’m the king of homes and reach out anytime you’d like to learn more about this real estate stuff
Transcribed from video
The difference between CONVENTIONAL, FHA, SONYMA, and VA loans! How they impact YOU as a home buyer! By Stephen King
