When it comes to financing homes in Collegeville PA, most homebuyers have several options to choose from. Each has advantages and disadvantages, but not all are appropriate for every buyer. This brief overview of the most common options can help you focus your search for a loan:
- Conventional mortgage. This is the basic mortgage that most people use. You would ideally make a 20% down payment for this type of loan. If your down payment is smaller, you’ll have to pay for private mortgage insurance (PMI). Conventional mortgages tend to have the lowest total costs for borrowers. However, they have more rigorous requirements to qualify than some other types of loans. You’ll need a down payment of at least 3%, a healthy credit score, and a solid work history or other reliable income.
- Government-backed mortgages. These include FHA, VA and USDA loans. Requirements are lower for FHA mortgages than they are for conventional loans. VA loans are for veterans and don’t require a down payment or PMI. Interest rates are usually lower as well. USDA mortgages are for homes in rural areas.
- Adjustable rate mortgages (ARMs). As the name suggests, the interest rates on these loans can fluctuate with prevailing rates. These loans often start with a fixed rate for a period of time, and then switch to a variable rate. ARMs can be risky for buyers unless the loan has a cap on the rate.
- Jumbo mortgages. These are used for loans over $548,250 (the 2021 limit for conventional mortgages). The amount may be higher in areas where homes are more expensive. You need a down payment of 10-20% to qualify for a jumbo mortgage. You must also have substantial assets and a FICO score of about 700.
When you’re ready to buy a new home, contact several potential lenders to discuss your options. After you’ve decided on a loan type and are pre-qualified, you’ll be in a great position to shop for new homes in a W.B. Homes community.
Founders Estate at Providence offers single-family estate homes in an intimate neighborhood in Upper Providence Township. The community is close to an array of stores and restaurants. Philadelphia and its suburbs are just a short drive away.
Call W.B. Homes today at 215-800-3075 to start planning your new home in the Founders Estate community of homes in Collegeville PA.