Financing Guide


 
  • The Financing Process
  • Loan Limits - 2008
  • Securing Financing, The Easy Way
  • What We Do That Other Agents Don't
  • Special Financing
  • First-Time Home Buyers
  • Self-Employed Buyers
  • Buying a Fixer-Upper for Owner Occupancy
  • Buying a Fixer-Upper for Resale and Profit
  • About Down Payments
  • Multi-Unit Buildings
  • About Private Mortgage Insurance (PMI)

The Financing Process
For a detailed checklist, please send your request via the form below.

Estimated Loan Limits  - $562,500
[Single-Family Mortgages Loan Limit estimates, as of January 31, 2008] 

        First Mortgages:   
                One-family loans: $417,000
                Two-family loans: $533,850
                Three-family loans: $645,300
                 Four-family loans: $801,950

        Second Mortgages:   
                One-family loans: $208,500
                Two-family loans: $266,925
                Three-family loans: $322,650
                 Four-family loans: $400,975

        Source:  Bradley Cohen - Mason Dixon Funding

Securing Financing, The Easy Way
The purchase of a home will be one of the largest and most important financial moves of your life. Unfortunately, it is impossible for most homebuyers to make a truly informed choice when it comes to securing financing. Why is this? There are an enormous number of lenders to choose from. There is an array of financing programs available. The combinations are infinite. You don't know where to start or what to look for when comparing your various options. Wouldn't it be so much more convenient, efficient and simple if you could have someone else do all that work for you? And what if it was someone that not only had your best interest at heart, but also someone you've already found? Look no further. You don't have to shop around. Let us use our experience in finding buyers the best financing possible for their unique situations to guide you the processes of finding and financing the purchase of a home that meets your needs. We provide this additional service at no further cost to you.


What We Do That Other Agents Don't
We continually shop for excellent financing for our buyer clients; and our sellers benefit, too. Another agent won't put the kind of time and effort into helping clients find out about lesser-known programs that could help them substantially. Below market financing, niche programs, and expert loan personnel make a big difference in putting a transaction together and keeping it together. When buyers can buy more house than they thought they otherwise would be able to afford, and have a monthly payment that they can comfortably handle, everyone benefits.


Special Financing
If you go directly to a lender, the loan officer will usually offer you a conventional mortgage. You may have better options than what a typical lender will offer you. Almost everyone has some special financing concerns, and there are many special financing programs to address them. Below, we have outlined just a few of the programs available for homebuyers, such as below-market financing, a low down payment, and various other good things: tax credits, property tax abatement, even closing cost and down payment assistance. Even if you find a lender who has a below-market financing program, we may know of one that is better!


For more information on how we can help you find a way to finance your purchase, contact us. Barry Levy spent 15 years in the mortgage industry before joining the Levy Team. This background gives him the ability to arrange special financing for our clients. He enjoys structuring your buying experience to take advantage of every possible program that lowers your cost or permits you to enjoy a better house than you could otherwise afford.


First-Time Homebuyers
If you fall into this category, you may qualify for a number of special programs. We can help you take advantage of all of the programs for which you qualify. You can get below-market financing with a low down payment, no mortgage insurance, and, for certain first-time homebuyers in DC, a 5-year property tax abatement, even closing cost and down payment assistance. Maryland offers a small tax break for first-time homebuyers. Homeownership outside DC does not disqualify you as a first-time homebuyer. Although DC provides the best programs for first-time homebuyers, we also know of programs for people buying for the first time in Maryland and Virginia. Buying a home is a big project. Buying your first home has the added stress of the unfamiliar. Call us with your concerns - We will explain how it all works and why it is worth doing.


Self-Employed Buyers
Yes, you can get financing. If you report enough income and have good credit, then two years' tax returns and a year-to-date Profit and Loss statement will probably suffice to get you financing at a rate comparable to that available for a salaried employee. If you have not yet been self-employed for at least two years, you probably will need a larger down payment.


Buying A Fixer-Upper For Owner Occupancy
If you would be interested in a house that needs work, let us know -- and tell us how much work you can handle. Some need cosmetics and minor repairs. Others may need new baths and/or kitchens. Others may need total rehab costing on the order of $40,000 or more, and require the services of a general contractor. We can advise you on all of this, and help you make sure that the finished product is worth the effort. The financing will be more expensive than for a house in good condition. The worse the condition, the higher the down payment amount and the interest rate the lender will require. However, once you have completed the work, you can refinance the mortgage.


Buying A Fixer-Upper For Resale And Profit
A developer needs to buy a property at a price which allows for a profit margin on the finished product. We can advise on the right price for purchase and sale, and what to put into the project. The cash requirement is usually substantial, and the interest rates are above the homeowner rates. You need to plan to carry the house empty for a number of months. We are in touch with a number of lenders who will do this type of financing. If you line up your financing first, and correctly estimate your fix-up costs, you can come out substantially ahead. If you don't, you can lose your shirt. It is essential to be extraordinarily knowledgeable yourself, or work with an advisor who is. We have worked with a number of clients who purchase, rehabilitate, and resell properties; and we have the experience necessary to provide valuable advice for you on this type of investment. Contact us to find out how we can help you in your particular situation.


Multi-Unit Buildings
You can get normal owner-occupant mortgage rates if the property you wish to purchase has four units or fewer, and you do indeed live there. If you say you are going to live there in order to get good financing, and actually live somewhere else, you are guilty of bank fraud and may be sent to jail. Do not do it. If the property you wish to purchase has five or more units, you require commercial financing. Commercial financing typically requires twenty percent (or more) down payment. Rates and availability will vary, depending on your circumstances.


About Down Payments
The more cash you have available for down payment and closing costs, the easier it is to get a loan. However, shortage of cash does not necessarily mean you cannot buy. There are programs in which the required down payment is only 3%. In one program, the entire down payment can be a gift. There are a few lenders who will loan you money against your anticipated federal tax credit. We even have programs requiring only $500 or even nothing down. Some programs require excellent credit, while others merely require good credit. If you have bad credit, you need a large down payment. You need to talk to us to find what program will be best for you, and where to get it.


About Private Mortgage Insurance
Private Mortgage Insurance (PMI) is required by most lenders in most but not all of their programs, especially those with low down payments. There may be an up-front fee as well as a monthly premium. The monthly premium raises your cost. You have to qualify for a monthly payment that includes Principal, Interest, Taxes, and Insurance (PITI). The "insurance" referred to is homeowners' hazard insurance. Mortgage insurance is additional. FHA programs call this MIP (Mortgage Insurance Premium) instead of PMI (Private Mortgage Insurance).


Ellen Levy
Ellen Levy
Associate Broker