A purchase money loan is a type of mortgage that’s used to buy a home. What makes it different from other home loans is that it’s not a refinance mortgage, but rather it’s evidenced by the trust deed at the time the homebuyer purchases the home. Borrowers can obtain the loan from private source of funds, a credit union, or a bank.
Types Of Purchase Money Loans
Conventional Purchase Money Loans
This is a common type of purchase loan since mortgage broker office or banks initiate it.They comply with the Freddy Mac and Fannie Mae, so you can package and sell after closing in the secondary mortgage market. For exceptional borrowers in the special categories, the down payment requirement starts from zero, but it can go as high as 20% or more.
FHA Purchase Money Loan
One of the things that make this loan favorable for most people is its down payment that can be as lowas 3.5% of the sale price. There are also states that may offer secondary financing to help with closing cost and downpayment.
These loans are governed by housing and urban development and insured by the Federal Housing Administration. Take note that an investor can hardly get an FHA loan as itsonly accessible to borrowers that occupy the property.
The VA Purchase Money Loan
This loan is best suited for non-active and active military and their spouses but under special circumstances. The good thing about the loan is that it comes with a zero down payment, but it’s still possible for a borrower to put down a down payment of any amount.
Purchase Money Loan and Foreclosure
The decision whether or not to borrow money for foreclosure is dependent on whether you want to live in it, resell quickly or flip it. If you choose to buy it as an investment rather than a home to live in, you might find financing a foreclosure difficult.
The Los Angeles mortgage broker local office are best suited toowner-occupied homes. So, investors who’re looking to purchase homes in damaged conditions at significant discounts can benefit from such loans.
For more details visit - https://www.hardmoneylenders.finance/
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