To see if you qualify for a mortgage loan contact your bank, credit union, or a local mortgage broker. Based on your credit scores and history, debt to income ratio, length of employment and income, a mortgage lender will determine which mortgage loan options are the best fit for your home purchase. Your mortgage lender is the expert in answering any questions you have about financing a loan. When you know how much home you can afford to invest in, it makes shopping for your home a less stressful experience for you while it helps your Realtor to zero in on only those homes that are in your price range.
Conventional Loan: This loan program offers the lowest rates and best closing cost terms. It is a Fannie Mae/Freddie Mac loan for which you will need credit scores over 680 and be able to show you have 5% of your own funds earned and saved. If you don’t have your own 5% towards down payment, you can ask a close relative to gift you the 20% down payment. If you have no gap in your full time employment of more than 6 months within the last year, the income you make on your job is allowable in qualifying for a conventional loan.
FHA Loan: With a requirement of 3.5% down and a credit score in the low 600′s the Federal Housing Authority loan may be right for you. The FHA allows all of your down payment money to be gifted to you by a close relative. The income from your job is allowable in qualifying for this loan as long as you have no gap in employment of more than 6 months.
FHA mortgage insurance is similar to the private mortgage insurance (PMI) required for conventional mortgages with down payments below 20%, but there are some key differences. Unlike the traditional PMI, the FHA MIP includes a 1.75% up-front fee at time of closing. The fee is usually included in the loan, so you pay it over the life of the loan. There is also a 1.2% annual fee added to the loan which will be paid in monthly installments.
Homepath Loan: This loan is available for homes that were foreclosed on by Fannie Mae or Freddie Mac and offers low down payment as well as will pay most of your closing costs.
South Carolina State Housing Loan: This first time home buyer loan offers a competitive fixed interest rate mortgage and depending on your income, also offers down payment/closing cost assistance and is available through participating lenders. The state defines “first time home buyer” as a borrower who has not owned a home in the last 3 years. This requirement is waived for:
- A single unmarried parent who is the custodial care giver of a child under the age of 18, or has been separated from spouse for at least 6 months, or has a recorded divorce decree/sparation agreement.
- A borrower who is 100% permanently disabled as determined by SSDI, SSI, or is the custodial parent or legal guardian of at least one dependent (regardless of age) who is 100% permanently disabled or handicapped as determined by SSDI/SSI. (Appropriate Documentation Required)
The State also has the Palmetto Heroes Program for Police Officers, Fire Fighters, EMS, Teachers, Nurses and Veterans. Borrower(s) must meet SC State Housing’s First-Time Home Buyer requirements.
USDA Loan: The USDA Rural Housing loan can only be used for homes located in federally designated rural areas. It provides 100% financing with no monthly PMI (Private Mortgage Insurance), and it allows the seller to pay closing costs. Credit score – low 600′s. Most of Laurens, Anderson and Pickens counties are eligible areas for this loan as well as outlying parts of Spartanburg and Greenville counties. You must meet the same job requirements as noted for FHA loan. When searching for homes, your Realtor can advise you if a home is in a USDA designated area.
VA Loan: This loan is available to eligible military veterans or their spouses and provides 100% financing, no monthly PMI and also allows for the seller to pay closing costs.
