General  FAQ:

If you're looking to buy a home, you may be wondering which type of loan is right for you: an FHA loan or a conventional loan? Each loan has its own advantages and disadvantages, and the choice you make will depend on your specific financial situation and goals.

Conventional loans are typically a great option for borrowers with excellent credit, as they offer lower monthly mortgage insurance and  down payments for first time homebuyers  compared to FHA loans. 

FHA loans, on the other hand, can be a great option for borrowers with lower credit scores. FHA loans typically offer lower interest rates compared to conventional loans, making them an attractive option for borrowers who may not qualify for the best rates with a conventional loan. FHA loans are backed by the Federal Housing Administration, which means that lenders are able to offer more relaxed credit requirements and lower down payment options.

Ultimately, both FHA loans and conventional loans are great in their own ways, and the choice between the two will depend on your personal  situation and goals. If you have excellent credit and can afford a larger down payment, a conventional loan may be the best option for you. If your credit score is lower, or you have limited funds for a down payment, an FHA loan may be a better fit.

At Synergy Capital Lending, Inc., we can help you explore all of your loan options and find the best one for your unique situation. Contact us today to learn more.

A lender is a financial institution that makes loans directly to you. A broker does not lend money. A broker works with the wholesale side of lenders to find the best overall pricing for you. A broker has access to many different lenders that specialize in different loans.

At Synergy Capital Lending, Inc., we believe that everyone deserves a chance to achieve their homeownership goals, regardless of their credit score. That's why we work with all types of credit scores, ranging from 580 and up.

We understand that credit can be a barrier for some borrowers, but we're here to help. If your credit is keeping you from getting a loan, we can provide you with free advice on how to improve your overall credit rating. Our experienced mortgage brokers can help you understand the factors that impact your credit score and develop a plan to improve it over time. We're committed to working with you to find the best financing options available, so that you can achieve your homeownership goals.

At Synergy Capital Lending, Inc., we're passionate about helping our clients succeed. We believe that by working together and building a strong relationship, we can help you achieve your goals and realize your dreams. Whether you're a first-time homebuyer or an experienced investor, we're here to help you secure the financing you need to achieve your goals.

Contact us today to learn more about our approach to credit and how we can help you secure the loan you deserve.

Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change -- but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application.

Nevertheless, scoring models generally evaluate the following types of information in your credit report:

• Have you paid your bills on time? Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on your credit report.  Your payment history counts for about 35 percent of your overall credit score. 

• What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score.  Your credit card balances count for about 30 percent of your overall credit score.  

• How long is your credit history? Generally, models consider the length of your credit track record. An insufficient credit history may have an effect on your score, but that can be offset by other factors, such as timely payments and low balances.

• Have you applied for new credit recently? Many scoring models consider whether you have applied for credit recently by looking at "inquiries" on your credit report when you apply for credit. If you have applied for too many new accounts recently, that may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make "prescreened" credit offers are not counted.

• How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may negatively affect your credit score.

Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home.

To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It's likely to take some time to improve your score significantly.

An Appraisal is an estimate of a property's fair market value. It's a document generally required (depending on the loan program) by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. The Appraisal is performed by an "Appraiser" typically a state-licensed professional who is trained to render expert opinions concerning property values, its location, amenities, and physical conditions.

Private Mortgage Insurance (PMI) is an extra expense you should plan on paying if you put less than 20% down the loan amount for conventional loans.  Your loan officer is the best resource to discuss PMI options for your loan goals.   

Yes, we do have programs that you can pay zero monthly mortgage insurance with less than 20% down.    Sometimes the no MIP option isn't the best, so it's always good for us to compare the  pros and cons of each prior to proceeding. 

PMI is a type of insurance that protects against default on home loans. PMI mitigates risk to the investors who own mortgages, it allows people with down payments less than 20% to purchase a home. In many instances, PMI can be requested to be canceled once you pay off 20% of the loan amount. 

Lenders will automatically cancel PMI once the loan balance is paid down to 78% of the original appraised value.  

There are three types of mortgage insurance:

1. Borrower-Paid Mortgage Insurance: Most common type of MI. It is usually rolled into the monthly mortgage payment the borrower is responsible for. You can cancel the MI after you have paid 20% of the loan amount.

2. Lender-Paid Mortgage Insurance: The lender will pay the initial MI, but your mortgage rate is higher to compensate for that lender payment.

3. FHA Mortgage Insurance Premium:  You will pay MIP for the duration of your loan term unless you make a down payment of 10% or more. If you put 10% or more down then the MIP can be dropped after 11 years instead of the full loan term.

When a buyer closes on a loan, it means that all of the necessary paperwork and documentation has been signed and completed, and the funds have been transferred to the seller. Here's what buyers can expect during the loan closing process:

1. Signing the documents: The buyer will need to sign a variety of documents, including the loan documents, the closing disclosure, and any other relevant paperwork. This can be done either with a mobile notary who will come to the buyer's location or at the title/escrow company.

2. Funding the loan: Once all of the documents have been signed, the lender will transfer the funds to the seller. This can take a few days, depending on the specifics of the loan and the timing of the transaction.

3. Recording the deed: After the funds have been transferred, the deed will be recorded with the county. This is typically done by the title/escrow company and can take up to a few days to complete.

4. Receiving the keys: Once the deed has been recorded, the buyer will receive the keys to their new property. The timing of this can vary depending on the specifics of the transaction, but it typically happens within a few days of the loan closing.

Overall, the loan closing process can be a complex and lengthy one, but it's an important step in the homebuying process. Buyers can expect to sign a variety of documents, transfer funds, and wait for the deed to be recorded before receiving the keys to their new property. By working closely with their lender and title/escrow company, buyers can ensure that the loan closing process goes as smoothly as possible.

Buydown points are points paid in exchange for getting a lower interest rate on the loan amount. Your loan officer will discuss interest rate options with you in detail.