There are all kinds of decisions that have to be made when looking to buy homes for sale in Oviedo or another Florida property. One of the most important is determining what kind of loan would be best for you and your financial future.
Before you go shopping for a mortgage broker, know which loan you would like to have when buying homes for sale in Oviedo by learning more about your loan options.
Below are three loan options to consider.
FHA Loan
FHA loans may be the only option for borrowers that have a high debt-to-income ratio and low credit scores.
Insured by the Federal Housing Administration (FHA), this type of mortgage loan insures lenders that the loan will be paid back on homes for sale in Oviedo or another real estate property. Borrowers will be able to spend up to 56 to 57 percent of their income on monthly debt obligations. This includes car loans, student loans, credit cards, and mortgages.
Minimum down payment may be as low as 3.5 percent and may be able to secure an FHA loan with a credit score of 580 and even less, in some instances.
What’s great for borrowers looking at FHA loans on homes for sale in Oviedo is that these types of loans offer flexible lending standards.
FHA loans are perfect for individuals who:
- Have low credit scores
- Can only make small down payments
- Refinancers with little equity
- Will be paying a large amount of their take home pay to cover the mortgage
Conventional Loan
Conventional loans typically cap the amount allowed on debt-to-income ratios to approximately 45 percent or less. Debt-to-income ratio is the percentage of monthly income spent on debts, such as credit cards, car loans, child support, student loans, and mortgages.
Conventional loans are perfect for individuals who:
- Have good or excellent credit scores
- Can provide a standard down payment of 20 percent
- Monthly mortgage payment cannot exceed 28 percent of gross monthly income, including taxes, insurance and other fees
VA Loan
The Veteran Affairs offers this loan to active duty military personnel and veterans. In some cases, members of the National Guard and reservists may be able to quality for VA loans, as well as widows and widowers of military personnel who died while on active duty or from a disability related to their service.
These loans are guaranteed by the VA, but are not funded by the Veterans Affairs office. VA loans come from private lenders who honor the features outlined by the VA loan.
VA loans are perfect for military personnel who:
- Do not want to make a down payment since it is not required when buying homes for sale in Oviedo
- Would like to have 100 percent financing, which can be offered for qualified borrowers
- Can handle a funding fee, which ranges from 1.25 percent to 3.3 percent of the loan amount
Talk to an Experienced Real Estate Professional
Whether it’s Oviedo real estate or other homes for sale, you should talk to an experienced real estate professional who can advise you on local properties as well as the type of loan you may want to pursue.
