Home Loans Understanding Your Options

Home Loans Understanding Your Options #northernvirginiarealestate #mortgage #homefinancing

When obtaining a mortgage, buyers have several options and must navigate the approval process, which sellers often verify through their realtor.

**Mortgage Types**:
**Fixed-Rate**: Offers stable payments over 15, 20, or 30 years, ideal for long-term buyers.
**Adjustable-Rate (ARM)**: Lower initial rates that adjust after a fixed period, suitable for short-term buyers.
**FHA Loans**: Low down payment (3.5%) options for first-time buyers or those with lower credit.
**VA Loans**: No down payment for veterans and active military.
**Jumbo Loans**: For high-priced homes, exceeding conventional loan limits.

**Down Payments**:
**Conventional**: Usually 5% minimum, but 20% avoids private mortgage insurance (PMI).
**Low Down Payment Options**: FHA, VA, and some conventional loans, though they may include mortgage insurance.

**Mortgage Approval**:
**Pre-Approval**: Provides a clear borrowing limit, making offers stronger. The seller's realtor will often confirm details with your lender.
**Credit Score**: Higher scores get better rates; lower scores may increase costs or limit approval.
**Debt-to-Income Ratio**: Lenders prefer this under 43%.
**Employment & Income Verification**: Proof of stable income, such as pay stubs or tax returns.
**Assets**: Sufficient savings for the down payment, closing costs, and reserves.

**Take note! Very Important!** A seller's realtor will confirm your pre-approval and financial details with your lender before moving forward with a purchase agreement.


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