Home Creations

Basic Financing Information

• Visit with a lender to figure out the type of loan best suite your financial situation.
• Work with our participating lenders or lender of your choice.

• Credit (biggest factor in approval)
• Rent history / mortgage history
• Income (based on gross monthly income before taxes)
• Debts
• Assets
• Job History
• Current major purchases (eg. car, furniture, vacation, jewelry). Hold off on such expenses until after closing on your home.

• Current rent
• Insurance (car, health, renter's)
• Utilities
• Food (unless paid for with a credit card)

• Down Payment. Range from $0 to 5% of sales price depending on type of loan. This amount is paid at closing.
• Closing Costs. Range from $2,000 to $10,000. Fees charged by lender and title company. This amount is paid at closing.
• Prepaids. This amount is paid at closing and it includes:
  • Homeowner's insurance (14 months)
  • Property taxes (3 - 12 months)
  • Interest (day of closing to end of the month)
• House Payment (PITI). Includes Principle (P), Interest Rate (I), Taxes (T), and Homeowner's Insurance (I).
  • If you close on Sep 30, payment starts Nov 1.
  • If you close on Dec 11, payment starts Feb 1.

Loan Programs

Description

• 3.5% down payment based on sales price
• Down payment can be gift from relatives (no expectation of repayment)
• Qualifying ratios: 29% (house) & 41% (house & all credit debt). Example: If you make $1,000 before taxes (gross income), your maximum house payment can be $290 (29%) per month, with your maximum
  house payment plus other credit debt payments not exceeding $410 (41%) per month.
• Upfront & monthly mortgage insurance
• Easiest loan for buyers to obtain. Not as credit–sensitive. Allows for higher debt–to–income ratios.

• Must be active or retired military
• No down payment required—100% financing
• Qualifying ratios: 41% (house or house/ credit debt)
• No upfront or monthly mortgage insurance
• VA funding fee—may be financed into loan or paid at closing
• Less than 10% of veterans have VA loans (U.S. Dept. of Veterans Affairs, 2009)
  Must be married to count both buyers’ incomes (not the case with FHA & Conventional loans)

• 5% down payment
• Qualifying ratios: 28% (house) & 36% (house & all credit debt)
• No upfront mortgage insurance
• No monthly mortgage insurance with 20% down payment