As a Realtor, when I assist people in purchasing a home, one of the areas that I always get questions about is the loan process. With so many options out there, what should a prospective buyer ask about? While nothing can replace the advice of a qualified mortgage professional, I have created a couple of tables to answer some of the more basic questions that can arise in relation to mortgages.
|
Loan Type- |
Minimum Down Payment Needed |
Interested Parties Contributions (Amount of Closing Costs that Seller can Pay)* |
Days Needed in Escrow (Amount of Time Needed Between Contract Signing and Closing) |
|
USDA (Guaranteed Loans)- Not Available In All Regions |
0% (Loan may be for total purchase price) |
100% (Seller may pay all closing costs) |
60 Days? (Can be longer depending on work load) |
|
FHA (Federal Housing Authority) |
3.5% (May be “Gift” from family or other eligible donor ) |
6% (On $100,000 loan, Seller may contribute up to $6000 towards Closing) |
30 Days-45 Days |
|
VA (Veterans Administration)- Based on Military Service and other applicable standards |
0% (Loan may be for total purchase price) |
4% (On $100,000 loan, Seller may contribute up to $4000 towards closing) |
30 Days-45 Days |
|
Conventional Loans |
Require a minimal of 5% Down Payment and can usually be closed in 30 Days. The amount of closing costs that can be paid by a seller is determined by the Down Payment paid in addition to whether the house is a primary, secondary, or investment home. |
|
Primary and Second Homes |
||
|
Loan to Value Ratio- 75% or below (Would require 25% Down Payment or larger) |
Loan to Value Ratio- 75.01%-90% (Down Payment between 10%-24.99%) |
Loan to Value Ratio- 90% -95% (Down Payment between 5%-10%) |
|
Seller may contribute up to 9% |
Seller may contribute up to 6% |
Seller may contribute up to 3% |
|
Investment Homes |
|
Seller may contribute up to 2% |
*Seller contributions can cover closing cost, pre-paids, insurance…etc. For complete list, please contact closing attorney.
Information is for educational purposes only. Please seek out the help of a qualified professional before making decisions regarding your personal finances.
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All photos and written content were produced by Bryan Giffis Copyright 2009 - All Rights Reserved. This content may not be reproduced or reprinted, except for Active Rain Re-blogging, without express written permission of Bryan Griffis, REALTOR®, Chapman Realty, Brunswick Georgia.
