Huge media coverage this past year has engrained in us that in order to qualify for a home loan you need to have a great credit score, at least a 20 percent down payment and a bunch of reserve money in the bank. Well, that's not necessarily true. There are a number of mortgage options around for potential buyers but you just have to know where to look to find them.
Sadly, with the absence of accurate information about available home loan programs to home buyers with special needs; that lack of information discourages many potential buyers from even considering applying for a home loan let alone shopping around for the best deal possible given their particular situation. As a result potential buyers are missing out on low home sale prices and record low interest rates.
The first question many are asking is, "Do I need a 20 percent down payment for a home loan?" The standard down payment is still 20 percent but it can be as low as 10 percent or less including no down payment!
For those potential home buyers who have little to no cash to put down, they still have multiple options available to them.
First of all, the FHA (Federal Housing Administration) only requires 3.5% down payment on its insured mortgages while other programs will accept nothing down and will even finance the loan for more than the price of the home when closing fees are included.
Veterans have options too. If you are a veteran or are currently an active member in the military, you can obtain a zero-down Veterans Affairs guaranteed mortgage. Furthermore the Veterans Administration will also allow the seller to pay the buyers loan fees as well as the closing costs as long as they do not exceed 6% of the home sales price.
If a home buyers is willing to live outside the city then there is a good chance that the borrower can get a no down payment loan if they purchase a home in one of the many communities around the nation that is eligible for a rural guaranteed mortgage. The definition of a "rural property" is one that is located outside of a large metropolitan area with a local population at or below 20,000.
The next issue to address is your credit score. For typical mainstream loans that are provided by some of the nations biggest institutions they are still requiring credit scores to be in the mid 700's. But you can still find loans with a lower credit score.
For example, most lenders that are providing FHA loans only require credit scores in the low to mid 600's while some of the bigger FHA originators will accept credit scores in the upper 500's.
The last item to cover is debt-to-income ratio. Thankfully these days, when a loan application travels through the "automated underwriting" systems used by Freddie Mac, Fannie Mae and FHA, potential buyers that have a high monthly total debt level between 45% to 55% of their household income, they usually get approved as long as they have some other positive compensating information somewhere else in their application.
Just like potential home buyers need to shop around for the right mortgage loan for their given situation, Real Estate Agents and Realtors(R) should also shop around for the best NHD report available and by choosing Property I.D. as your NHD provider, that's exactly what you will get; the most accurate and complete NHD report available anywhere!