Buying homes in Kirkland Wa

What are the differences between Buying Options in real estate?


If you have sold in the past or even purchased a home, you may have seen different terms such as FHA, Conventional, VA or Cash out. While Kirkland real estate agents know what these terms mean and can convey the information to their buyer or seller, it helps to have a grasp of what these terms mean.


 - Cash out typically means the buyer has actual cash to pay for the property out right without obtaining a loan. The timeline for these purchases can usually be completed much quicker as there are less parties involved and the buyer simply brings a check to closing for the seller and the deal is done.


 - A conventional loan is probably the most common as it requires a percentage down first and the balance is amoritzed over 10-40 years depending on the loan details. There are conventional loans that break down into 80% / 20% where the buyer actually applies for two loans to cover 100% of the property and brings no money to closing.  These loans are not as easy to obtain anymore but with good credit can still be found. A conventional loan typically helps those selling one home to buy another and can put down a substantial amount at closing. The loans are often lower interest rate and better terms.


 - An FHA loan is a federal assistance mortgage loan in the United States insured by the Federal Housing Administration. The goal of an FHA loan is to make it self-supporting, based on insurance premiums paid by the buyers. FHA loans usually require a minimum of 3% down and will have the added cost of mortgage insurance to cover in case of default. The benefit is most buyers don't have to have excellent credit to qualify but the home they purchase does have to meet certain safety standards.


 - A VA Loan is available only to those serving or have served in the US military. The VA loan guarantees a portion of the loan so the lender is protected against losses if the borrower does not make the payments and defaults on the loan. This VA guarantee effectively replaces the security a lender normally receives by requiring a down payment on the property. This can also help the buyer purchase the property with little or no money down.

For more information on which loan might be right for you and to receive updates or info on any home or property in the Bellevue or Kirkland real estate area, please send us your name and email and we would be happy to assist you.

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