The Blog ofBeverly James

Loans from Lenders

When you have decided that you are ready to buy a new home, there’s a pretty good chance you will need to get financing. It’s best to be at least prequalified if you’re not already preapproved by a lender before having your agent show you houses. A lender can help you find out what price range you fall under. By only looking at homes that you are comfortable paying for, this keeps both you and your agent from wasting time.

There is a difference between getting prequalified and preapproved. To be prequalified, you talk to the lender about your income and expenses and he gives you a letter of prequalification. In order to be preapproved, you have to turn in information proving everything you previously discussed. Once the lender submits all of your info to the underwriter and nothing else is needed, the underwriter will preapprove you. Preapproval is basically a commitment to lend you money.

There are four basic loans that are common in the residential home buying process.


  • Non-government loan
  • Hardest to qualify for
  • Requires strong credit
  • Minimum 5% down
  • Mortgage insurance can eventually be removed

VA (Veterans Affairs):

  • Exclusively for Vets
  • 0% down payment
  • No mortgage insurance
  • Unmarried surviving spouses may also apply
  • Can be used more than once
    • In some cases, on more than one home at a tim

FHA (Federal Housing Administration):

  • Low credit scores
  • Easiest to qualify for
  • Great for 1st time buyers
  • Minimum 3.5% down
  • Mortgage insurance

USDA (US Department of Agricultural)

  • No mortgage insurance required
  • 0% down payment
  • Income limits apply
  • Only in rural areas

_B2A0668highres1.jpgBeverly James ~ Realtor/Consultant/Blogger