What's Better: FHA or Conventional Loans?

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With the spring real estate market warming up, I'm receiving a lot of questions about what type of home loan is right for you. There are a lot of different options out there, and I'll be explaining a few to you today.

The FHA loan is a good option because they have flexible guidelines and allows for a wider range of buyers to purchase homes. They're lenient with credit scores and will accept borrowers with debt-to-income ratios that are a little higher. This works for some people, but it's simply not for everyone.

Other conventional loans are good options, too. Fannie Mae and Freddie Mac have new products that only require 3%-5% down on a home loan. However, if you don't have the best credit score, this will be reflected in your interest rate. These loans focus more heavily on your credit score, so if you're building better credit, these may not be the right fit for you.

There really is no magic formula when it comes to finding the right loan program. Everyone's situation is unique, and will probably require a different loan program.

If you're looking to find a program to fit your needs, please don't hesitate to contact me. I can do a credit health check-up and find a loan program that will work for you!

Have You Heard of the USDA Home Loan?

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Today I am going to be discussing the USDA Rural Home Loan program, which is a fantastic loan product that hardly anyone seems to be talking about.

This type of loan offers 100% financing, and requires a minimum credit score of 640. You can also include your closing costs in your final loan amount, and that is huge! 

Some of the catches to this loan are that it has more restrictive debt-to-income ratios and not every property is eligible for this loan type. This type of loan is only given to properties who fit certain population density requirements, and is aimed towards low to moderate income households.

However, the income requirements will differ by area, so be sure to speak with me if this type of loan product interests you. I am able to help with USDA Loans nationwide!

View this article for any additional information regarding USDA home loans.

Please don't hesitate to call and speak with me about this unique loan program. If you fit the criteria, it's really a great deal. Even if you don't fit the criteria, I'd still like to speak with you and figure out what type of home loan would be best for you.
 

Loan Advice for Self-Employed Workers

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For a more in-depth analysis to help you get a loan if you're self-employed view this great article. 

I recently received a very good question from a client, so today I am going to be speaking about how you can qualify for a loan if you're self employed. There are several reasons why it's harder for self-employed individuals to get mortgage loans.

1. Lending standards have simply gotten tougher. Ever since the market crashed a few years ago, it has been tougher to get approved for a loan.
2. There's a fine line to what you as a business owner report to the IRS for taxation purposes, and what you as an individual report as income so a mortgage lender can help qualify you for a loan. Self-employed individuals have a lot of expenses, and that reduces your income, which the IRS uses to calculate your taxes. 
3. You may not bring in revenue during your first year of business. This will cause issues when mortgage lenders require a 24-month average to calculate your income. This could create problems in reaching the standard income requirement if you have negative income one year. The most important thing here is to ensure that your income increases year-over-year.

The best advice I can offer to self-employed business owners trying to qualify for a loan is to speak with a mortgage lending professional such as myself, The Mortgage Doctor. We can discuss how you’re specific situation affects your ability to qualify for a mortgage. 

Please contact me with any questions you might have. I'm always willing to speak with you!

Information and/or data is subject to change without notice. This is not a commitment to lend or extend credit. All loans are subject to credit approval including credit worthiness, insurability, and ability to provide acceptable collateral. Not all loans or products are available in all states or counties.  ENG Lending and Bank of England are not affiliated with any government agency. ENG Lending is a division of Bank of England. NMLS 418481. Member FDIC.