Home Creations

Mortgage financing made simple

When you use our particpating lender for your new home financing, Home Creations pays your basic closing costs. This can save you between $2,000 - $2,500 in fees charged by the mortgage company and title/closing company. In addition, by using our participating lender you receive competitive interest rates, excellent customer service and access to numerous loan programs. 

Trying to figure out the type of mortgage loan best suited to your particular financial situation often seems harder than finding the perfect place to call home. The three types of loans, FHA, VA and Conventional, are described below, along with some brief comments about financing terms and the mortgage loan process.  

FHA Loan (Federal Housing Administration government loan)

• 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 as other loans)
• Allows for higher debt-to-income ratios

VA Loan (Veterans Administration government loan)

• 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)

Conventional Loan (non-government loan)   

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