Virginia Real Estate: Types of Mortgages

Have you decided to buy your first home? Are you an investor looking to flip a property? Either way, mortgages are an important aspect of any house purchase. Mortgages come in all shapes and sizes. Mortgages can have different terms, rates, and obligations based upon the type of mortgage you qualify for. Below are some basic types of mortgages. Each of the types of mortgages listed below have several different subtypes of mortgages that are best discussed with your lender.

Conventional Mortgage

This is one of the most common types of mortgages. This mortgage is a private transaction between yourself and a lending institution. There are several different types of lending institutions. One common example of a conventional mortgage is a loan from your local bank.

These types of mortgages can come with a variety of benefits. Because these loans are with private institutions, your lender has a lot more freedom to offer incentives or other benefits. These mortgages are typically accessible for individuals with a good job and good credit.

FHA Loan

These types of loans are backed by the federal government. FHA stands for Federal Housing Administration. This is the governmental body responsible for supporting these types of loans.

The benefit of a FHA loan is that you may qualify for these loans even if your finances or credit are not that good. The downside of an FHA loan is that you are limited in the number of times you can qualify for this type of loan and the rates are highly regulated. The federal government sets strict standards for the amount of downpayment that has to be made and the rates associated with the mortgage.

VA Loan

These loans are only available for certain qualifying individuals. VA stands for Veterans Affairs. These are excellent loans for service members. More highly regulated than FHA loans, these loans are even more accessible than FHA loans and conventional loans.

How to Choose a Mortgage

There are a lot of considerations in deciding which types of mortgage or lending institution is right for you. Some of those considerations are legal in nature. Mortgages can have provisions related to when the lending institution can foreclose, potential increases in payments during the lifespan of the loan, and several other terms that are important to know. If you are considering buying your first home or investing in real estate, consider working with a team to determine what financial arrangements are best for you. Consider a team of a real estate agent, a CPA, and an attorney to maximize your understanding of your potential purchase.

Virginia Real Estate: Types of Professionals

Are you thinking of buying or selling real estate? If so, you have several options for accomplishing this goal. Property can either be sold by owner or may involve a brokerage firm. Either way, you need to be familiar with the various types of professionals that are involved in a real estate transaction, what their role is, and how best to interact with those professionals. Understanding the role of each professional will speed up the process and help you buy the right property or sell your property for the right amount.

So who are these professionals, and what are their jobs? The professionals listed below may not be a complete list of who is involved in your particular property.

Real Estate Agents

The first major group of professionals involved in the sale or purchase of a property is real estate agents. Real estate agents are licensed professionals that have access to special databases that provide significant amounts of detail for properties in your local area. Real estate agents use these databases to find homes for sale or to find comparable homes to determine how much your property should be sold for.

Real estate agents, however, are not lawyers. They cannot provide you with legal advice or tell you what type of deed you need. A real estate agent is also restricted from helping you settle certain types of disputes. The primary role of a real estate agent is to give you experienced pricing and location services.

Real Estate Inspectors

The second major group of professionals is home inspectors. Home inspectors are professionals that are hired to make sure that the property is safe, bug free, and structurally sound. Home inspectors can come in many different types. Some home inspectors are not able to provide engineering advice, and cannot tell if you have structural issues.

The most common type of home inspector will simply perform a cursory investigation, and will not attempt to uncover any hidden defects in the property. If you have substantial concerns about the safety of the property, you need to invest in a more thorough evaluation of the property by an engineer or other type of inspector.

Real Estate Financing

The third major group of professionals is the mortgage company or banking industry professionals. These individuals are there to provide financing or evaluations on the value of a property. A mortgage company may be essential if the property needs repairs prior to sale, or if a couple needs additional help to purchase a home. Mortgages can come in all shapes and types. These types of mortgages will be discussed in greater detail in a different post.

Lawyers

The final major group of professionals is lawyers. Lawyers play a huge role in the purchase or sale of property. A lawyer can provide legal advice in the event that there is a dispute between you and any of these other groups of professionals. A lawyer can also review deeds and provide guidance on how best to proceed on the sale or purchase of a property. Finally, a lawyer’s services can be used to make sure the sale of the home is properly recorded.