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Money Matters!

The W Home Group / Buying  / Money Matters!

Money Matters!

When buying or selling a house, there are multiple financing terms and options. This article will break down all of the loan types the good, bad and ugly of each!

Conventional-

This program allows for a down payment as low as 3% and is typically used by buyers with higher credit scores.  This program is available in all areas and generally has less strict appraisal guidelines than other programs.  Seller assist is capped at 3% of the contract price unless the buyer is making a down payment of 10% or more.

VA Loan-

The VA loan program allows for 100% financing and there are no longer county loan limits.   Sellers are allowed to contribute toward the allowable buyer closing costs.  Who better to sell to, than a buyer that has served our country?

Appraisals take a little longer since a certified VA appraiser is required.

USDA-

If you are a seller in qualified geographic locations, a great way to advertise your home is with USDA financing. It allows buyers to put 0% down on homes in areas that are considered rural! For properties in Carroll County, Harford County and other outlying areas in Maryland, this option could be for you!

Loans typically take longer to close, but are part of a government program and can be a great way to market your home!

FHA-

The FHA loan program will allow you to target to a larger audience.  The minimum down payment is 3.5% and this program allows for a higher debt to income ratio along with competitive rates even when a buyer doesn’t have credit scores over 700.  Seller assist is capped at 6% of the purchase price.

The appraisal is slightly more strict, since safety standards are important and things like handrails are required.

No matter what type of financing your buyer brings to the table, make sure your agent calls the lender who has drafted the pre-approval to ensure the buyer is well-qualified to purchase your home!

If you have questions about what financing would work best for you and your situation, reach out to us, we are always here to help and can put you in touch with a local lender!