09/21/2020
So youโre refinancing (๐๐ฌ๐๐จ๐ค๐ข๐!) or buying a home (๐๐ค๐ฃ๐๐ง๐๐ฉ๐จ!), and you know you need a mortgage. โฃ
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๐Before you head to the bank or talk with a lender, you need to know the difference between a conventional, FHA, and VA loans. โฃ
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Hฬณeฬณrฬณeฬณโฬณsฬณ ฬณaฬณ ฬณcฬณrฬณaฬณsฬณhฬณ ฬณcฬณoฬณuฬณrฬณsฬณeฬณ:ฬณโฃ
๐๐จ๐ง๐ฏ๐๐ง๐ญ๐ข๐จ๐ง๐๐ฅ ๐ฅ๐จ๐๐ง:โฃ
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๐๐ท๐๐๐๐๐๐ก๐๐๐: A conventional loan is a loan not insured by the government. This means thereโs no guarantee for the lender if you fail to repay.โฃ
๐ฐ๐ท๐๐ค๐ ๐๐๐ฆ๐๐๐๐ก: Because itโs not insured, a conventional loan requires a 20% down payment.โฃ
๐๐๐๐๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ก๐๐๐๐ : Canโt do 20%? Then youโll need to have private mortgage insurance (PMI). PMI picks up the tab for your lender if you happen to default on the home.โฃ
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๐๐ ๐ฅ๐จ๐๐ง:โฃ
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๐๐ท๐๐๐๐๐๐ก๐๐๐: A FHA loan is a loan insured by the Federal Housing Administration (FHA).โฃ
๐ฐ๐ท๐๐ค๐ ๐๐๐ฆ๐๐๐๐ก: Because itโs insured, a lender can offer a downpayment as low as 3.5% of the purchase price.โฃ
๐๐๐๐๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ก๐๐๐๐ : Youโll need a credit score of at least 580 with 3.5% down, and 500 with 10% down.โฃ
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๐๐ ๐ฅ๐จ๐๐ง:โฃ
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๐๐ท๐๐๐๐๐๐ก๐๐๐: A VA loan is a loan guaranteed by the Veterans Administration (VA). It is only available to current members of the U.S. armed forces, veterans, national guard or reserves, and surviving spouses.โฃ
๐ฐ๐ท๐๐ค๐ ๐๐๐ฆ๐๐๐๐ก: There is no minimum down payment or PMI required for buyers purchasing a primary residence.โฃ
๐๐๐๐๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ก๐๐๐๐ : Borrowers do pay an initial funding fee โ a one-time charge between 1.25% and 3.3% of the loan amount.โฃ
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If you have questions about real estate, shoot me a message. Iโd love to listen and help in any way I can!โฃ
Kadra Parkman
(334) 320-8720