What Type of Home Loan are You Approved For?

Buyers always know how much they are approved for, but they don’t always know what kind of loan. This is crucial information to know and share with your Realtor.  Properties such as foreclosures are being sold "as is" and almost always require cash or a conventional loan. 

The reason being that FHA loans, which are government backed, require a stricter appraisal than conventional loans (which require a higher credit score) do. The logic is that since they are government backed and easier for people to obtain, the properties need to be in working condition where no major fixes will immediately be needed. For example, windows should be in working order and there shouldn’t be broken glass. That doesn’t mean that carpet or paint needs to be pristine. 

Where this comes into play is when a family wants to purchase a foreclosure home and they only have FHA funding. Almost 100 percent of the time the bank will not even look at the offer as things will need to be fixed. Of course, there are always exceptions, sometimes local banks will be more open to looking at FHA funding.  Still, know what you are approved for and let your Realtor know so the buying process can be as seamless as possible.

Kind Regards,

Deanna

Deanna Howard, Realtor, SFR, CREN
Iowa Realty
752 10th Street
Marion, Iowa, 52302
(319) 929-3836
dhoward@iowarealty.com

www.deannahoward.com

Licensed in the State of Iowa