Home Purchase With Garvens Group of Churchill Mortgage

Homeownership has been a key component of the American Dream for decades. Each year millions of Americans become first-time homeowners, and most do so by financing their home purchase with a conventional, FHA, or VA loan product. The availability of long-term fixed-rate financing makes it possible for most individuals to purchase a home, and various government programs offer added benefits for those who may need additional help.

Most homebuyers will find that a conventional loan product fits their financing needs perfectly, and the vast majority will opt for a 30-year fixed-rate mortgage—though 15, 20, and 25-year terms are also available. The most important quality of a conventional loan is its fixed interest rate: the interest rate and payment will remain constant throughout the duration of the loan. Virtually every bank, lender, and credit union offers conventional loan products.

It is important to understand the limits of conventional financing, especially for purchases where timing is crucial. The biggest impediment for many first-time homebuyers is the limitation on credit scores. Conventional loans require a minimum credit score of 640. They also require a minimum down payment of 5%, though many lenders have recently introduced a 3% down option. Conventional loans with less than 20% down also require mortgage insurance, which adds to the monthly payment and will remain until the home reaches 20% equity.

For those who fall just outside the requirements of conventional financing, the Federal Housing Administration (FHA) offers relaxed requirements to make the dream of homeownership attainable to even more people. FHA loans require a minimum credit score 580 and down payment of 3.5%. FHA loans do, however, require up-front and monthly mortgage insurance premiums, and unlike with conventional loans the monthly mortgage insurance on FHA loans does not go away.

Loans through the Veterans Administration (VA) offer the best features of conventional and FHA loans plus some added benefits. VA loans do not require mortgage insurance, have no down payment requirement, and have the same 580 credit score requirement as FHA loans. While VA loans do require a “funding fee”—basically an upfront mortgage insurance premium—this funding fee can be financed into the loan, diminishes with a higher down payment, and is waived entirely for disabled veterans.

As important as the right loan product is, it’s only one component of a smooth and successful real estate transaction. Your loan officer is only one member of an entire team that should be working to make your home-buying and home-owning experience as simple as possible. Other team members include a real estate agent, a handyman, and, if you have one or more rental properties, a property manager. Oftentimes, any one of these professionals can introduce you to other trusted and competent individuals to add to your team, and it’s important to assemble your entire team before you even begin shopping for houses.

The home purchase process can be both daunting and highly rewarding. As the most important financial decision you may ever make in your lifetime, it is imperative to understand all aspects of the home-buying process. This starts with seeking out a qualified mortgage broker that has both knowledge of, and access to, all the financing options available.

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Company NMLS ID # 1591 (www.nmlsconsumeraccess.org); CO–Mortgage Company Registration, Churchill Mortgage Corporation, 104 S Cascade Ave. Ste. 201A, Colorado Springs CO 80903-5102, Tel 888-562-6200, Regulated by the Division of Real Estate
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