The 2 Minute Drill On Loan Types

The 2 Minute Drill On Loan Types

The home buying process can seem a bit daunting if you don't know where to start. Hell, it can be pretty damn scary when you think about it. The thought of committing a few hundred thousand dollars can keep you away from staking your own claim on the American Dream.

But don't let that deter you.  Get some help.  Ask questions, and everything will be just fine.

To help with that process, I am developing a series of videos covering many different topics that can clear the air!

With the help of Derek Goss of Capacity Lending, we go over the main loan types that you will encounter on your home search.  Take a look!

There are many different ways to pay for a home, but the main ways are cash or getting a mortgage.  Let's talk about a few of the options that are available to you.




Loan Types

  1. Conventional

  2. FHA

  3. USDA

  4. VA

A conventional loan is the next best thing to cash.  You'll be able to buy any house on the market.  No restrictions on the home's condition or location.

An FHA loan gets a big of a bad rap, but it can be an awesome option for first time home buyers or someone with a lower credit score.  More on that later.  It is a government backed loan and it actually protects the buyer by making sure the home is in "livable condition" before allowing it to be purchased.

A USDA loan (yes, the same as the label you see on meat) is for homes in rural areas.  Another government backed loan that is allowable in areas under a certain population.  No urban dwellings here.

The VA loan is for our veterans.  So if you served this is a route for you!

What's My Downpayment?

  1. Conventional: 3-5%

  2. FHA: 3.5%

  3. USDA: 0% but in rural area

  4. VA: 0% but be a qualified veteran

Most folks think they need to put 20% down to buy a home, but that's not true!  Sure, if you want to avoid PMI (more on that in another video), 20% is the magic number.  Truth be told, not everyone has $20,000 to put down on a $100,000 loan amount.

What About My Credit Score?

  1. Conventional: 620 minimum

  2. FHA: 580

  3. USDA: 620

  4. VA: 580

Your credit is a major determining factor in what loan you can receive, and the rate that you lock in.  Conventional and USDA loan are a minimum 620, FHA and VA go down a bit further to a 580.  Those numbers DO change from lender to lender, so be sure to shop around.  Also, understand that a lender may require more funds, documents, a higher rate, or other items if your score is at the lower end of the spectrum.

I Want To Build Or Buy Land

  1. Land Loan: 10% down, Build within 3 years

  2. Construction loans

Sometimes folks want to live out in the country.  A mortgage lender can handle that as well!  Capacity Lending has land loans and construction loans for you.  There are certain requirements that they have, so be sure to ask your lender those questions that apply to your situation.

There you go, it is simple as that!  If you have any questions, please don't hesitate to reach out to Derek or me, leave a comment, share, tweet, Facebook!

Derek Goss: dgoss@capacitylending.com 469.640.0401

Anthony Armstrong: anthony@haloelite.com 469.400.0771


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Phone: 469-400-0771
Dated: April 4th 2017
Views: 1,481
About Anthony: About Halo We understand that for many people, buying or selling a home is probably the largest i...

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