Navigating the Path to Financing Your Property Purchase

Whether you’re buying a home to live in or an investment property to build wealth, understanding your financing options is a crucial step. As a real estate agent (I am not a mortgage professional), I collaborate closely with lenders to help clients navigate the financing process and explore available options. Below is a guide to getting financed, an overview of specialized loan types, and expanded details on financing options tailored to different needs.

Steps to Getting Financed

1. Evaluate Your Financial Health

Begin by reviewing your credit score, income, and debts. Lenders use this information to determine your eligibility and loan terms. A good credit score often results in better interest rates and lower monthly payments. Taking steps to improve your credit, such as paying down debts or correcting inaccuracies on your credit report, can strengthen your position before applying.

2. Get Pre-Approved

A mortgage pre-approval helps you understand how much you can afford and shows sellers that you’re a serious buyer. To get pre-approved, you’ll need documents like pay stubs, tax returns, and bank statements. Your lender will also discuss potential financing options based on your financial profile, ensuring you’re prepared to make competitive offers.

3. Explore Specialty Products and Grants

Down Payment Assistance Programs: Local, state, or federal programs that provide financial aid for your down payment.
First-Time Homebuyer Grants: These can cover down payments or closing costs for eligible buyers.
Energy-Efficient Mortgages (EEMs): Help finance energy-efficient upgrades to your new home.
Workforce Housing Programs: Targeted at professionals in essential sectors like education, healthcare, or public service.

Discuss these options with a mortgage professional to see what’s available and if you qualify.

4. Choose the Right Loan

Work with your lender to explore various types of loans (detailed below). The goal is to find one that aligns with your financial goals and lifestyle.

5. Submit Your Mortgage Application

Once you’ve found a property and had your offer accepted, you’ll officially apply for a mortgage. This involves submitting detailed financial information and undergoing the underwriting process, where the lender verifies your financial status and the property details.

6. Close on Your Loan

After your loan is approved, you’ll proceed to closing. This is where you’ll sign final documents, pay any remaining costs, and officially secure your financing. At this stage, the property becomes yours, and the keys to your new home or investment property are handed over!

Types of Financing

Conventional Loans

Flexible Down Payment Options: Typically require 20% down but may allow as little as 3% with private mortgage insurance (PMI).
Variety of Loan Terms: Fixed-rate and adjustable-rate mortgage (ARM) options available, catering to different financial goals.
No Government Backing: Not insured by federal agencies, making them ideal for borrowers with strong credit and income stability.

FHA Loans

Low Down Payment: As low as 3.5%, making it a popular choice for first-time buyers.
Lenient Credit Requirements: Accessible to borrowers with lower credit scores compared to conventional loans.
Mortgage Insurance: Requires both upfront and monthly mortgage insurance premiums (MIP).

VA Loans

No Down Payment Required: For eligible veterans, active-duty service members, and their families.
No PMI: Eliminates the need for private mortgage insurance, reducing monthly payments.
Competitive Interest Rates: Often lower than conventional loan rates, offering significant savings over time.

USDA Loans

No Down Payment: Available for buyers in designated rural and suburban areas.
Income-Based Eligibility: Targets low- to moderate-income borrowers.
Affordable Financing: Often features lower interest rates and reduced mortgage insurance costs.

Jumbo Loans

For High-Value Properties: Exceed conforming loan limits set by Fannie Mae and Freddie Mac.
Stringent Requirements: Require higher credit scores, significant income, and larger down payments.
Tailored Solutions: Available in fixed-rate or adjustable-rate terms for luxury property purchases.

Non-QM Loans (Non-Qualified Mortgage Loans)

Bank Statement Loans: Use 12–24 months of bank statements to verify income, making them ideal for self-employed borrowers.
Profit and Loss (P&L) Loans: Rely on CPA-prepared profit and loss statements to determine income for self-employed individuals.
Flexible Qualification Standards: Designed for those with unconventional income sources or financial situations.

Investment Purpose Loans

Debt Service Coverage Ratio (DSCR) Loans: Focus on property cash flow instead of personal income, ideal for rental property purchases.
Fix and Flip Loans: Short-term financing for acquiring and renovating properties for resale.
Flexible Financing: Help investors acquire, rehab, and sell properties quickly for profit.

Work With a Mortgage Professional

While you can work with any licensed lender, partnering with a trusted professional ensures you receive expert guidance and exceptional service. Here are three highly trusted lenders who consistently go above and beyond, in our experience:

Philip Lucrezia
Loan Officer, GoRascal
Direct: 845-494-5848 | Email: phil@gorascal.com
Website: https://lo.gorascal.com/phil/
Office: 845-579-8383

Bruce Salik
SVP & Branch Manager, Rate Mortgage
Direct: 914-263-7999 | Email: bruce.salik@rate.com
Website: https://www.rate.com/loan-officers/bruce-salik-79065
Office: 845-423-3300

Jean Volcy
Branch Manager, LoanDepot
Direct: 845-659-1445 | Email: jeanvolcy@loandepot.com
Website: https://www.loandepot.com/loan-officers/jeanvolcy
Office: 914-908-1207

Your Next Step

Securing financing for a home or investment property doesn’t have to be intimidating. With the right team and the right loan options, you can turn your residential or commercial real estate dreams into reality. Contact a licensed mortgage professional today to explore your options and take the first step toward your goals!

We are happy to help with introductions.

Let’s work together to make your next move a success!

Mortgages and Financing - Where do you Start?