All lenders are not the same! I have many clients who go to a lender and got turned down on a loan so they just thought that they have to save or make more money and try it again another time. The tricky part with the lenders is that unless you deal with loans on a day-to-day basis a lender can quickly start talking over your head especially if you are a first time buyer.

There are four basic loans to choose from; FHA, VA, Utah Housing, And Conventional. Most lenders do not do ALL these loans, but a lot do. Realize that if a lender is unable to do a type of loan, they will tend to “downplay” that loan since if you decide to go with that loan they will not get your business.

Conventional Loans:

All lenders can do this type of loan. There are many different programs that are available from ARMs to “Buy downs”. This type of loan is a must for investors (non-owner occupants with no “family” in property. These loans do tolerate a co-borrower but the occupant must have income and credit and usually some down payment on their own. These loans are good thing to look at if you have 20% down (this is when the mortgage insurance will drop off) or are looking at a loan over $160,000. Lenders will “go through” or “broker out” to other mortgage companies to do loans they can’t do. Most of the time there are additional fees since you basically have two lenders. Rates and expenses are all over the place, so it is generally a good idea to get a couple of quotes. Buyer must be able to qualify and provide a down payment for at least a portion of the loan when using a co-signer. This loan is usually not the best type of loan for first time buyers.

FHA:

Some lenders can do this type of loan. Be sure to ask you lender if he will do the loan directly or if he plans on brokering it out to another lender. You will run into problems with all government loans if the lender does not do the loan directly “in-house”!  All government loans are very buyer protective. They will regulate what the lender can charge you. This will mean the fees charged by the lender will not change a whole lot from one lender to the next. Some lenders will want to charge fees to the seller, be sure to ask your lender up front what charges he or she will have for the seller. Most will say none, if your lender does charge fees to the seller, unless the seller agrees up front to pay them 9 times out of 10 he or she will raise the purchase price to cover these expenses so you will end up paying them anyway. The property has to be built up to FHA “Code” or be FHA approved. FHA loans are assumable loans and have no pre-payment penalty. Co-signers are no problem! The occupant needs to have no bad credit (good & no credit is okay) and does not have to have a income or down payment if taken care of by a co-borrower. Co- borrowers must be relatives of the occupant. FHA loans must be owner occupied for at least a year, after that it can become a rental. This is a great loan for first time buyers or buyers with less than 20% down and a loan under $160K!

Utah Housing:

Very few lender will do the Utah Housing Loan. The state of Utah will “subsidize” the rate (most of the time about a percent lower than FHA). All the same as the FHA (above) except UTHSG will place a income cap based on household size and area ($45,000, 2 person family, Utah County). You must also agree to never rent the property. There is also a “Recapture Clause” (see lender for details). This loan is a great deal for people who fit the criteria!

VA:

Only for veterans. Check with the VA for the amount of eligibility. Zero down loan, has some disadvantages to the FHA with relation to fees. Most people who qualify for the VA still will do the FHA loan. See lender for details.

It doesn’t matter to me what lender you want to use, and there are a lot of good ones out there. Different lenders will specialize in deferent areas, be sure to go with a lender who does a lot of your type of property! Call me and I would be happy to recommend a few to check out.

I look forward to working with you!

R. Scott Stone
Principal Broker