So you’re finally ready to buy a home…
This is big stuff and you should be very excited and proud of yourself!
But before the fun of shopping for your first home in Des Moines can begin, you need to get pre-qualified and select a loan program.
Since everyone is different and is facing unique circumstances, it is impossible for me to tell you that there is one magical loan that is ideal for every first-time buyer. Instead, you need to select one that offers you the most desirable terms (percentage rate, down payment, income requirements, etc.).
In order to simplify the selection process for you and help you identify the best loan program for your first home, I’m breaking down the most popular options in today’s post.
Does coming up with a big down payment put a noose around your neck? FHA might be the way to go. Not only do they require a lower down payment but they are easier to qualify for than a conventional loan. In fact, your less than stellar credit score and a down payment of just 3.5% is often enough to snag yourself the proud label of homeowner. For these reasons, many first time home buyers opt for this option.
Are you one of the amazing and selfless members of our military? A VA loan may be your best bet. No, the VA doesn’t actually lend you the money for your mortgage. However, they will guarantee it and help you score far more favorable terms than the average joe. In fact, you may be able to get away without having to make a downpayment at all with this option. VA loans are also easier to qualify than a conventional mortgage, despite being held to the same limits of a conventional loan. All you need to do to qualify is apply through the VA for a certificate of eligibility and then we can get you pre-approved for your mortgage and start house hunting.
Less Traditional Loan Options
Aside from the traditional route of getting a mortgage, you could have a few more options available to you. Let’s say that you are planning on purchasing the property purely as an investment with no plans of living there. If you have an IRA, you may be able to leverage those funds to obtain a mortgage or purchase the property outright. However, to do this, you will need to set up an LLC and all funds generated or lost will be owned by your IRA. Obviously, this is a wonderful way of building out your retirement fund, but if you were hoping to have access to the cash flow, this won’t be your best option.
Planning on living on the property? You may also be able to pursue a seller financing option. In this scenario, the sellers will take on the role of the bank. Often, this will allow you to avoid making a large down payment. However, it can be challenging to find a seller willing to go this route.
Planning On Using Your First Home As An Investment?
If you’re planning on leveraging your first property as an investment, a conventional loan may actually be your best bet. Conventional loans are most commonly fixed-rate mortgages that come with more stringent rules and requirements. They also require a larger down payment. If your credit score, career, and bank account are all healthy, then you may be able to score a sweet deal on a conventional loan. Not to mention, you may feel more secure in your investment because your mortgage will be in compliance with government-sponsored Fannie Mae and Freddie Mac.
Want Help Selecting The Best Mortgage For Your Des Moines Home?
Financing is one of the most crucial elements in the purchase of your Des Moines home.
I would hate to see you be led astray by a bank or loan officer that doesn’t truly have your best interest at heart. I work with some of the best and most trustworthy mortgage brokers in town and I would love to match you with the one that is most qualified to get you the best results. Simply reach out to me and let me know you’re ready and I’ll get you on the fast-track to your Des Moines dream home.
Stay financially vigilant! Your credit score is your best friend when applying for loans so make sure you’re doing everything you can to keep that high!
It’s starting to warm up, so don’t forget to stop and smell the roses… when they bloom soon!