Seattle Financing

 

Will you need to borrow money to purchase a home?  If so you are not alone.  According to recent polls 92% of all home owners have borrowed money to buy a home.  Getting a home loan is one of the most intimidating processes you can do.  It is not fun to open your entire financial history to someone so they can analyze your credit to see if you qualify.  You risk having them say no.  But when the lender says, "Yes" it is followed by a big sigh of relief and you jumping for joy.

 

To make your lending process easier, contact Dave Hanson or call me at 206-686-7525 and I would be happy to refer you to a quality lender.

 

If you are a first time buyer be sure to check out our Seattle First time home buyer section or if you're a buyer who also needs to sell a home, be sure to see our seller section on buying vs. selling to help you understand which one you should do first.

 

Types of loans 

There are three types of loans that most borrowers can receive when they apply for a loan: FHA, VA and Conventional.

 

FHA

FHA is a government backed loan that allows for a minimum of 3.5% down with some credit problems and higher debt ratios. 

 

VA

VA is a government backed loan that only allows veterans to borrow money and they can go as low as 0% down and zero closing costs.  A veteran is allowed some credit problems and higher debt ratios.

 

Conventional

Conventional financing is a term that covers all other types of loans. 

 

 

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.  To understand financing be sure to get our "6 Things you Must Know Before You Buy".  This will save you a lot of money.

 

**6 Things you should know before buying a home**

 

 

There are many different types of loans that a loan officer will speak to you about:

  • Fixed 30-year
  • Fixed 15-year
  • ARM (adjustable Rate Mortgages)
  • Jumbo Mortgages
  • Interest Only

FIXED 30-Year

This loan is amortized (paid off month-by-month) over 30 years and the interest rate will remain the same the entire length of time.

 

FIXED 15-Year

Same loan but amortized over 15 years.

 

ARM

This loan has an adjustable interest rate which changes according to the loan documents.  Common Arms are 3/1, 5/1, 10/1.  What this means for example: 3/1 is fixed for 3 years; then every year after that, the interest rate changes and can go up or down.  This loan is best for buyers with lower-qualifying incomes.  In exchange for the lower initial interest rates, the borrower bears the potential burden of increasing rates in the future.

 

Jumbo

This is a loan that is over $567,500 as of June, 2009 in the King County area.  The interest rate is a little higher because it is higher in risk to the lender.

 

Interest Only

No part of the loan is paid back and only interest is paid to the bank.

 

 Seattle first time home buyer