Assess Finances

Make sure your finances are in order. A higher credit score will help with the interest rate for your loan.

GET PRE-APPROVED Pre-approval will require a quick meeting with your lender’s loan officer to ascertain the home price you will be able to purchase based on stated income, available funds, and a credit check. At this stage, employment and income are not verified. The lender then produces a letter for you to present at the time of your offer. This letter demonstrates that you have begun the loan process and will be a potential qualified buyer for the seller. Pre-approval is not a guarantee of final loan approval, but is a necessary step prior to finding a suitable home. In a fast-paced market of many multiple-offer situations, many sellers may not even entertain an offer without this pre-approval letter. VILLAGE’s best advice is to get pre-approved prior to beginning your home search.

Your Loan Options

Several types of mortgage loans are available. Your lender will help you determine which is best for you and your circumstance.

Conventional Mortgage

  • Usually amortized over fifteen to thirty years.
  • Usually available for home purchase or refinance.
  • Fixed rate, adjustable rate, balloon loan, interest only, 3 option, etc.
  • Minimum down payment as low as 5%, but usually 10%; less than 20% down.
    payment requires PMI (private mortgage insurance)

Federal Housing Administration Mortgage

  • Loans insured against default by the United States government.
  • Down payment usually less than 10%.
  • FHA adjustable rate mortgage has 1% rate increase with 5% lifetime rate increase.
  • Requires mortgage insurance.

VA Mortgage

  • Buyer can finance up to 100% of sale price.
  • Buyer must have VA eligibility certificate.
  • Veteran can use VA program more than once.
  • Funding fee to guarantee the loan can be financed into the loan or paid in cash by buyer or seller.

Contract for Deed

  • Seller may hold the mortgage for the buyer.
  • Usually a balloon payment to the seller in five to seven years.
  • Seller determines amount of down payment.

Get Pre- Approved Estimated Cost Sheet