When buying a home, at any level your first step is getting pre approval for a mortgage. There are several different types of mortgages that allow flexibility to the borrower and fit each scenario a little differently. Here are a few scenarios buyer present and the best type of loan for each:

“I want the lowest monthly payment possible”

You best bet will be to go with a conventional loan with 20% down. Being that you’re putting that much down, you will not have a PMI (Private Mortgage Insurance which is a fee for any loan in which you didn’t put down at least 20%) in your monthly mortgage. You will also likely have instant equity, being that you owe likely 80% of the value of the home.

“I cant afford 20% down, but want a lower payment”

Conventional is still available without 20% down. You can go 5%,10%, or sometimes even 15% down. You will still have PMI, but you will also avoid putting down and extra 5-15% percent of the home down at closing. This is a great loan option to keep the loan lower by putting a good amount of money down.

“I don’t have much money for down payment but have excellent credit and great job”

The best option in this scenario would possibly be a 100% financing loan. This is where you borrow the loan to purchase the home and a second small loan to pay for what would’ve been your down payment. While you are borrowing more, your interest rate is usually the lowest possible on the market at that time. Its really a great product for somebody that is buying a home and plans to occupy for at least 5 years. This is only for first time homeowners.

“I would like to buy a multifamily home (up to 4 units), and purchase a single family in another year or two”

The best bet would be to get a FHA loan. This is a government insured loan where you put down 3.5% down. This is only available to first time buyers (or those whom haven’t owned in 3 years), and only requires you to occupy for 10-12 months. This option usually is very flexible with credit and can possibly work with lower scores.


If you have any further questions on pre approval please reach out and I will do my best to explain.




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