Getting approved for a home loan starts with understanding what type of loan you need. As you may have noticed above, there are quite a few option. They all are good, just not for all borrowers.
Then you need to find yourself a mortgage specialist. You could start with Googling ‘Chicago mortgage specialist‘ or ‘Duluth mortgage specialist’ but it does not count as good shopping for a mortgage source unless you get yourself a few quotes at about the same time.
Why a few?
Because you’re looking for the best home loan you can get and not all lenders and brokers were created equal and you want the one that has the best program for you.
Why at about the same time?
Because mortgage rates change, sometimes more than once a day… Daily changes tend not to be large, but sometimes they are. A few weeks ago, I saw a case where, at 10AM, the borrower could have gotten a rate of 4.000% had he had his loan originator had all the documents needed to lock the rate. But they did not. They got them after 3PM the same day. By then, the best rate they could quote this very same borrower was 4.750%.
VA loans are great for people who are serving or have served in the military, or their spouses. They have no loan limits and allow for no-down-payments. They are not always the best option. And they are never an option for investment loans (unless borrowers live in one unit for the prescribed time, then convert the property into an investment property).
FHA loans are great for people who have low down payments, employment or credit issues. They have the same limitation for investment properties as the VA.
USDA loans are meant for people who earn below the average income for their area and live in rural / suburban areas. And they are meant for owner-occupied properties only but the property can be converted into an investment one later.
Conventional loans come in many forms, there is a loan for all types of properties, owner-occupied, second homes, or investments.
There are renovation mortgage programs and construction mortgage programs. (Most people use the term conventional mortgages for loans that Fannie Mae or Freddie Mac would purchase. These loans are the conforming conventional loans. Anything that these two entities doe not like is called non-conforming conventional.
Non-conforming loans tend to have higher interest rates than the conforming ones, however, they are great loans for certain situations.
Knowing Your Loan Types Is Key
Getting approved for a home loan is different based on the different loan types, though there is a lot of overlap. Knowing what loan type is best for you will take you a long way towards getting approved for a home loan without headaches. So, browse this site and see what your options are.