Before a realtor can show a home to a client, that client must show a loan preapproval letter from a Mortgage Consultant. The three types of loans are Conventional, FHA, and VA. Otherwise, the client will be a cash buyer and must show proof of funds in his or her bank or brokerage account such as Fidelity or Schwav.
Starting in 1944, VA loans have approved more than 19 million loans for homes. VA loans are for Veterans and military personnel who need to buy a property or refinance their current loan. Usually, no downpayment is required for a VA loan. FHA or Federal Housing Administration insures loans usually for first time buyers, buyers without a perfect credit rating, and requires a 3% down payment which is a lower down payment than required for a conventional loan.
Conventional loans usually require a more perfect credit rating than a FHA loan to qualify and may require higher interest rates or fees than a FHA loan. If the buyer qualifies for a FHA and a Conventional loan, a good way to decide which loan is less expensive is to compare the fees, interest rates, mortgage insurance, and required down payment.
I always refer my clients to the most professional Mortgage Consultant who will check my buyer’s credit and advise him or her as to which loan he or she best qualifies for. After being approved for a loan, the buyer can purchase or rent a home for a prise as high as his or her loan is approved for. In the meantime, a client can use a mortgage/loan calculator to estimate his or her mortgage or loan before the buyer makes an appoint ment to talk to a Mortgage Consultant, to have a general estimate of what to expect.