When it comes to determining the right loan program and term, it is a matter of gathering all the applicable data, scrubbing for which programs and terms are available, and analyzing pro’s and con’s of each one to find the best fit. Important things to consider are how long you see yourself in this loan/home, and what your risk aversion level is.
The first question may be whether or not you are a veteran. If a VA loan is available to you it is in most cases the best available financing out there. If you are not a veteran there is no reason to even bring it up.
What part of town are you looking to buy in? If it is in a designated rural area you may want to explore USDA financing. This may be worth considering if you are even looking nearby.
Any FHA loan is a great option if you are a first time homebuyer or even a move up buyer looking to keep cash in your pocket. One advantage of an FHA loan is it requires only a minimum 3.5% down payment.
Your credit profile, occupancy status, debt to income ratio, length of time at job, down payment percentage, and a myriad of other factors will either open or close certain loan programs, and help pin down the right choice for you. Your loan officer should be quite thorough in exploring your options and helping make the various pros and cons quite clear to you.
There are lots of niche products out there right now depending on the scenario and it is important to have access to as many options as possible. Even after determining the right loan program and type you should still be given choices as to what interest rate works best (higher rate with lowest costs all the way to paying points up front to buy down to the lowest possible rate). The more informed you are as a buyer the better, and one size definitely does not fit all.
If you have any questions about this topic or any aspect of the mortgage business please don’t hesitate to call. Jared Fuller with Nova Home Loans – 623-792-6802