The Buyers Guide to the Pros/Cons of Washington Home Loans

by | Aug 12, 2012 | Real Estate | 0 comments

**thank you for stopping to talk with us today at the fair!  Please call or email with any questions as I am, as always, here to help!  updated class schedule is always available at www.freehomebuyerclasses.com or www.learningtobuyahome.com  ;-D  **

Hello there!!

Yep, it is that time again…Saturday night and I am typing up our weekly blog.  🙂  The last day for the Clark County Fair is tomorrow, and yes, we will be there…again!  Honestly though…I am so GLAD it is done as I am dog tired!  LOL  Now…don’t get me wrong…I LOVE the fair.  I love to talk to people, and meet people, and I have had a lot of fun (especially people watching!), but after 10 days, with no day off….I am ready.  🙂  It is a lot of fun though….and tomorrow my family will actually be joining me after my shift at the Home Buyer Education Booth so that we can walk around and enjoy it as well.  Is it weird that I have been there for 9 days and haven’t even walked around the exhibit hall?!  😀  Actually…I do that on purpose so that when my family comes that I am able to walk around with them and it is new to me as well.  Ok…so it might be a little strange, but I think we have already established that I may be a little off kilter!!  LOL

So….let’s get down to some fun stuff here…  For the past couple of weeks I have been trying to get you over a short explanation of loans pros/cons, but Chris Berg (Pinnacle Mortgage 503-320-0925) has been a little busy and hasn’t been able to get something for me.  Well….he worked the closing shift at the booth the other night, and yes, it does get slow sometimes so he had some time to send me something.  🙂  Please remember that this is only a very short and limited explanation, and for more information on any of these loans, you can call or email Chris directly.  His email is chris.berg@pmblending.com.  We also go into more detail at the free home buyer classes as well.   So, per Chris…..
Here is a brief overview of my pros and cons list for standard loans:

Conforming loans:

Pros- Multiple mortgage insurance options, no maximum income limit

Cons– Higher rates, higher credit score requirements, higher down payment requirements, longer bankruptcy and foreclosure and shortsale seasoning.  Must qualify for both the loan and the mortgage insurance. Smallest box to fit into out of all the standard loans.

FHA Loans

Pros-
 Lowest rates, lowest credit score requirement, low down payment requirement, no maximum income limit, shortest bankruptcy foreclosure and shortsale seasoning requirement, when you qualify for the mortgage you qualify for the mortgage insurance

Cons- A higher cost for the mortgage insurance while it is needed

VA Loans

Pros-Same rate as FHA, 100% financing, no monthly mortgage insurance, lowest payments

Cons-Must be a veteran

USDA Loans

Pros- Least expensive mortgage insurance loan, 100% financing, short bankruptcy foreclosure and shortsale seasoning, very low rates

Cons- Home must be in a rural\approved area, maximum household income limit, 3rd party underwriting means longer close time

Housekey Loan

Pros- 100% financing with Washington Bond 2nd mortgage, 1st mortgage is a FHA loan so see pros above

Cons-
 2nd mortgage must be paid back, higher rates than standard FHA loan, 3rd party underwriting means longer closing times, Cannot refinance loan until 2nd mortgage is paid off

Let me know if you need anything else on this!  ~Chris Berg

So there you have it!  🙂  Now if I may add a few things from a buyers agent perspective…
Conforming loans aren’t really used that often.  Often a FHA works better, but it really depends upon the buyer.  With a conforming loan, a fixer has a better chance of being purchased…but the home still has to meet some requirements.

FHA is really the most used home loan, and mortgage insurance (again, it is your friend) can be removed after 3-5 years.  I purchased my home back in 2001 with a FHA loan.  The home must be in a ‘safe and livable’ condition to FHA guidelines and codes….won’t be buying a fixer with this loan.  The home can need some cosmetic updating, but the bones have to be good.

VA is really the best loan out there, but I think our veterans deserve it.  We always say that if you can go VA, you should.  🙂  The home has to be in really good shape for VA as this loan has the strictest of the ‘safe and livable’ standards of any of the loans
USDA (RD) loans are used by many folks, but the home must be purchased NORTH of the 179th Street line….nothing in Vancouver.  So, currently that is Battle Ground, Ridgefield, La Center, Woodland, etc.  There is talk, however, that the RD may be pulling Battle Ground out of the RD area as of 10/1/12.  They have been talking about it for 3 years now, and this news just came out this week, so we will give you more information as we can get it.  Great loan, but again, home has to meet FHA inspection/condition standards.
Housekey loans are also good programs, but do carry some cons that for a lot of people make not using them better.  As of April of this year, the housekey underwriters receive a copy of the home inspection as well.  Homes purchased with this loan, again, have to be in fairly good shape.  The underwriters can, and sometimes do, ask for repairs that you might have been ok without, or that an appraisal didn’t call out….doesn’t matter though…if the underwriter calls it out, the repair is now a condition of financing.  This is where a buyers agent, and a good lender, helps you as we will do all we can to work it out.

As always, holler with any questions!  Email?  Phone?  Text?  Facebook?  Yep, yep, yep, and yep….You know where to find us, and yes, we are always here to help!!  🙂

If you know anyone who is thinking about buying a home, our next class is Sunday, August 19, 2012, at the Parsley Center (aka Bagley Center) located at 4100 Plomondon Road (just down from the main post office on Caples Road off of Fourth Plain from 9am12pm.  With reservations, lunch is included…. 🙂

Please call, email, text, or even facebook me (at Tracie DeMars Real Estate Q&A) anytime with any questions, or if there is anything I can do to assist you with your home buying adventure! As your buyers agent, I am, as always, here to help!! 😀

Thank you again for your business and for your referrals!

…as always…if you have already purchased a home, or no longer would like to receive these emails from me, please let me know and I will be happy to remove you from receiving any more.

Thank you again for attending the home buyer education classes, and I hope that you will continue to refer the classes out to your friends, family, and co-workers. Upcoming class dates and times are located at www.freehomebuyerclasses.com. Just click on the link on the left hand side. Or you can go to www.learningtobuyahome.com and click the links.

We appreciate your referrals and word of mouth! Also, if you have somewhere that we can place the flyers at, please let me know….
:-D

Next Week: Inspection and Appraisal….What is the difference?
Last Week: Buyers Due Diligence

Remember that you can always go to ‘Free Home Buyer Education’ on Facebook for all of my weekly blogs and upcoming class dates/times/locations. I post the weekly blogs on there as well.

Have a great day, and I will talk to you soon,
;-D

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA
360-903-3504

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