Purchase Programs

 

Conventional Purchase

 

A Conventional Purchase will require the buyer to invest at least 20% of their own funds into the purchase transaction.  This is a loan that is FDIC insured and will net great rates and great terms. 

 

Pros                                                                             Cons

Close Quickly                                                               20% Down Payment

Great Rates                                                                  Higher Credit Score Requirements

Basic Appraisal                                                            Higher Income Thresholds

No Monthly PMI payments

FDIC Insured Loan

 

FHA Purchase

 

An FHA Purchase will only require the borrower to furnish 3.5% of their own funds into the purchase transaction.  This money may be gifted by a direct family member or family member of a spouse or fiancé.  This is the most commonly used purchase program because it does offer extremely low interest rates and very low down payments.

 

Pros                                                                             Cons

Only 3.5% Down Payment required                              Strict Appraisal Guidelines       

Great Rates                                                                  Underwriting times 3-4 weeks

FDIC Insured Loan                                                      Monthly PMI

Gift Funds Excepted                                                     Income Restrictions

620 Credit Score Requirement                                      Lower Loan Limits

Higher Income ratios

 

FHA Home Improvement Loan

 

This type of loan will allow you to borrow up to 25% more than the purchase price of the home, up to $35,000, to do repairs and updates to your new home.  There is still the 3.5% down payment requirement and there are asset requirements that go along with this type of loan that do not necessarily affect the other loan programs.

 

What can be included?

Roof – Siding – Windows – Flooring – Kitchen Cabinets – Appliances – Furnace – Central Air – plumbing – Electrical - General Home Updates

 

What is excluded?

Landscaping of any sort – Additions – Moving of Walls – Garage Replacement – High End Appliances – Geo-Thermal Heating – High End Flooring if it is out of scope for area

 

Pros                                                                             Cons

Repairs can be done before you move in                       Strict Approval Guidelines

Interest on additional 25% is Tax Deductible                 Licensed Contractor to complete

                                                                                    Strict Appraisal Guidelines

                                                                                    High Asset Requirements

                                                                                    Underwriting 4-8 weeks

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Action Home Loans