Loan Options for Buying a Home

The Mortgage Application Process

Application
Submitting Paperwork
Pre-qualification
Search for your Dream Home

- Work with your realtor to find the home that fits you. Continue to maintain good credit and check with your loan officer about any financial decisions that may affect your pre-qualification. Work with your loan office to customize a home financing plana for the home you want.

Make an offer with your realtor.
Make a full loan application

- Once a contract is accepted, reach out to your loan officer to set up home financing. Provide all required documents in a timely fashion. Work with your realtor to select a closing agent/title company that will handle your title services and closing.

Home Appraisal

Your loan officer will order an appraisal (which you will pay for).

Home Insurance

- You will need to obtain homeowners insurance for your new home

Underwriting and Application approval

- Work with loan processors and underwriters to formally approve the loan.
- An underwriter will look over your loan application from start to finish. They will see if any additional information is required and then make the decision to approve your loan

Settle on your new home

- Meet at the settlement table, sign on the dotted line and walk out with keys to your new home.

Common Loan Options

Conventional

A conventional loan is a mortgage loan that's not backed by a government agency. These loans come in all shapes and sizes, and while they don't provide some of the benefits as FHA, VA and USDA loans, conventional loans remain the most common type of mortgage loan

FHA

An FHA loan is a type of government-backed mortgage loan that can allow you to buy a home with looser financial requirements.

Limited FHA 203(K)

Provides financing for minor renovations and repairs up to $35,000 of your mortgage. Eligible repairs include:

Minor remodeling
Roof and Gutters
Plumbing and electrical
Decks, patios, porches
Door, windows
Septic and/or well
Fencing
Any non-structural repairs, excluding luxury items.
3.5% down
Primary residence only
Purchase or refinance
30 year fixed rate

Using the FHA 203k loan to buy an investment propertyListen to this episode from Legacy Queen on Spotify. Using the FHA 203k loan to buy an investment property

Standard FHA 203(K)

This loan allows the flexibility to finance major rehabilitation costing a minimum of $5,000 up to the FHA county limit. Eligible repairs include:

Repairs on a limited 203(k) PLUS
Structural damage
Major rehabilitation
Room Addition
Work that requires up to 6 months
Work that displaces a homeowner for 30+ days
Basement finishing
Any repairs, excluding luxury items, supported by after improved value appraisal.
1 general contractor
3.5% down
30 year fixed rate
Primary residence only
Purchase or Refinance

Homestyle

FNMA HomeStyle allows you to purchase and renovate a primary residence, second home, or investment property with a minimum down payment of 5% in a single mortgage up to FNMA county limit. Eligible repairs include:

Any and all improvements that are fixed to the property and add value
Structural improvements
Deck, garage, driveways
Landscaping, fencing
Interior updates such as a theatre or game room

May be used to add swimming pools, rec room, garages, accessory units and luxury items.

All conventional loan guidelines apply.

As little as 3% down

Purchase or refinance

Primary, second home or investment

Amortization terms: 10, 15, 20, 25, 20

Up to 75% of after improved value.

Documents Needed for Tips for a Smooth Loan Approval

Personal Identification
- Copy of Driver's License or Passport
- Copy of Resident Alien Card if not a U.S. citizen
Employment & Income
- W-2s and/or 1099s for the past two years.
- Most recent pay stubs covering 30 days of employment. Must include employers name and year-to-date income
- If self-employed or you have other non-salaried income: two years signed federal tax returns. A year-to-date profit and loss statement may be requested, depending upon the date your tax returns were filed.
Assets and Liabilities
- Two most recent statements for all bank, stock and retirement account. One statement if it covers a quarterly period.

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