How to Find a Lender
In today's world, there are various sources through which you can find lenders for your real estate needs. Apart from traditional sources such as newspaper ads, you can now also apply to lenders through the internet or referrals from your real estate agent. Our team has a list of reliable lenders that we have worked with in the past, who have proven their capabilities in dealing with difficult properties and poor credit scores. We would be happy to provide you with their contact information so you can choose a lender who suits your needs.
Choosing the Right Lender
Interview several lenders to evaluate the following:
- Ability to explain things clearly and return your phone calls in a reasonable time period
- Competitiveness of interest rates, costs & fees.
- Availability of loan programs that suit your credit profile and desired property
- Access to local loan approval committee that understands the kind of property you are buying
Choosing the Right Kind of Loan
Due to the variety of loans available on the market, it is not feasible to list and explain them all here. It is best to seek guidance from your lender to select the loan program that suits your needs. However, we have summarized the three most commonly used loan types below:
Conventional Loans - These are not guaranteed or insured by the government. They typically require a higher credit score and a larger down payment. Conventional loans can be either fixed-rate or adjustable-rate mortgages.
FHA Loans - These are guaranteed by the Federal Housing Administration and require a lower down payment (as low as 3.5%) and have more flexible credit score requirements. However, they also require mortgage insurance premiums.
VA Loans - These are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and surviving spouses. They typically offer lower interest rates and require no down payment, but may have additional fees.
For more detailed information on loan types, it is recommended to click the link provided at the end of this page.
- Fixed loan: The fixed rate loan assures your monthly payments will stay the same over the life of the loan, which is typically between 15 and 30 years. Fixed rate loans may be best if you intend to hold the property for a long period of time, say over 7 years.
- ARMs (adjustable rate mortgages): ARM’s may be suitable if you plan to sell or refinance your home within the next few years. The starting interest rate is typically lower than a fixed rate loan, saving you money initially. However, it is important to understand the index, the readjustment interval, the capitalization rate and downside risks of an ARM before making a final decision to use this type of loan.
- Intermediate ARMs: Also called Hybrid Loans, these loans can offer fixed interest rates for the first 3, 5, 7 or 10 years after which the interest rate adjusts with the market every 6 months or year thereafter.