RESIDENTIAL OVERVIEW: When purchasing real estate, very few people have the ability to purchase with all cash. Neither does it seem a wise investment procedure because leverage indicates that the best investment involves using the least amount of investment capital possible. Thus, this concept bring us to another means of purchasing property through the use of financing.

The amount of cash required of the buyer varies depending on the many loan programs that are now available. There are loans that require full documentation with 0 to low down payments, as well as programs that require little documentation but high down payment requirements.

Real Estate loans fall into several different categories for now we will focus on the residential market.

a. Conforming Loans: Loans which are below a certain dollar amount.
b. Loans that meet a certain qualifying criteria for borrowers equity percentage.
c. Required income and allowable debt, credit standards, and property characteristics.

a. Jumbo Loans: Typically are in available in larger amounts.
b. Jumbo loans are underwritten according to the specific guidelines of the investor, who will purchase these loans.
c. These loans have a wide spectrum of guide lines that could be approved from one investor to the next.

a. Governmental Loans: Fall into two categories, FHA/VA
b. Like conventional mortgages, these loans are also provided by commercial lending institutions.
c. The guidelines are set by the federal government.
d. They often offer low down payment, flexible credit underwriting guidelines.

a. Portfolio Loans: Loans offered by savings and loan institutions, and investors who cater to a very specific market, borrowers with impaired credit, difficult to document income, problem properties or some other characteristic which does not fit to the "standard" loan programs.

Want to get a pre approval?

ITEMS NEEDED FOR A LOAN APPLICATION

• 2 Years W2 Forms
• 3 Months Bank Statements
• 2 Years Tax Returns If: Self Employed, Own Other Property, 25% Income Commission or Bonus
• Statements for Credit Cards (Min Payments)
• Credit Report