2). Understand the loans that are out there!

The whole process can be overwhelming if you let it be, but it doesn't have to.. Understanding the types of loans out there, their costs, down payment amounts, how much a seller can contribute to closing costs can be instrumental in your budget and ties hand in hand with step number 1. VA, FHA, USDA, Conventional, Balloon, Interest Only.... yikes....

So in a blog I wrote The Top Loans for 2020 it breaks down which loan might be best suited for your needs and is a great resource. For the purpose of this article I will focus more on 3 types of 'typical' loans that we see more often in the Tampa market: VA, FHA and Conventional,

The VA loan is a loan made to veterans of the military who can acquire a certificate of eligibility.  The loan can 100% financing and allows the funding fee for the loan to be rolled in. 

The FHA loan offers as much as 96.5% financing of the purchase price. That means you would be required to pay 3.5% of the purchase price as a down payment. FHA financing over 80% requires a primary mortgage insurgence be added to the monthly payment. This insurance premium remains with the mortgage through the life of the loan. Most lenders require a minim credit score of 580 or better to qualify.

Conventional financing can sometimes go as low as 3% down or 97% of the purchase price. Loans of greater than 80% of the purchase price would require primary mortgage insurance, however unlike the FHA loan once the home obtains 20% equity of the appraised price vs the remaining loan balance the home owner can request to have the PMI removed.