Purchase Loan Programs:
Purchase Loan Programs:
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First-time Home Buyer:
First-time Home Buyer:
Buying a home for the first time can be an exciting and daunting task, but at Synergy Capital Lending, Inc., we're here to help you every step of the way. As a first-time homebuyer, you may have concerns about financing and affordability. That's why we offer financing options with as little as zero down and extremely low monthly mortgage insurance.
We understand that everyone's situation is unique, which is why we also offer loans for first-time homebuyers with challenged credit. No matter your credit score, we believe that you can get a great loan and own the home of your dreams.
At Synergy Capital Lending, Inc., we know that buying a home for the first time can be overwhelming, but we're committed to helping you navigate the process with confidence. Our experienced mortgage brokers will work with you to identify the best loan program for your needs, answer any questions you may have, and guide you through the entire process from start to finish.
Whether you're ready to take the first step toward homeownership or just exploring your options, we're here to help. Contact us today to learn more about our first-time homebuyer financing options and how we can assist you in achieving your homeownership goals.
There are many things to know when buying your first home.
There are many things to know when buying your first home.
Some areas our specialist will walk you through are:
Some areas our specialist will walk you through are:
The Benefits of Home Ownership
What you need to consider before buying a home
Resources available for first-time home buyers
Understanding the Basics of Home Mortgages
How we evaluate your mortgage application and determine what you qualify for
Why it is a good idea to use a Realtor
How to improve your credit or what to work on to improve your credit to put yourself in a position to buy a home.
What is a Conventional Loan?
What is a Conventional Loan?
Conventional loans are typically a great option for borrowers with excellent credit, as they offer lower monthly mortgage insurance and down payment compared to FHA loans. However, without excellent credit, a conventional loan could require a higher down payment and higher monthly mortgage insurance versus an FHA loan.
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, 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.
What are the different conventional loan types?
What are the different conventional loan types?
What is a VA Loan?
What is a VA Loan?
If you're a Veteran or active duty service member, a VA loan can be a great option for purchasing a home or refinancing your existing mortgage. One of the most significant benefits of a VA loan is the ability to finance up to 100% of the home's value, which means that no down payment is required. This makes a VA loan a great option for those who don't have a lot of cash saved up for a down payment.
In addition, VA loans don't require monthly mortgage insurance, which can save borrowers hundreds of dollars each month. This can make a significant difference in the affordability of the loan. VA loans also offer some of the best rates and pricing in the mortgage industry. The VA loan program is backed by the federal government, which reduces the risk for lenders and allows them to offer more competitive rates.
What Is VA Entitlement?
What Is VA Entitlement?
Veterans who are eligible for a VA loan have VA loan entitlement. VA loan entitlement is the dollar amount the Department of Veterans Affairs will guarantee on each VA home loan and helps determine how much a veteran can borrow before needing a down payment.
If you’re eligible for a VA loan, your Certificate of Eligibility (COE) will state the amount of your entitlement. There are two types of entitlement categories; Full Entitlement and Reduced Entitlement. There are also two tiers called Basic and Bonus entitlement. Keep reading as these are explained in the next few sections.
As of 2020, eligible Veterans with full entitlement no longer have limits on loans over $144,000. This means you won’t have to pay a down payment, and the Dep. of Veterans Affairs guarantees to your lender that if you default on a loan that is over $144,000, they will pay the lender up to 25% of the loan amount.
That doesn’t mean you’re limited to loans up to $144,000 or that you can borrow an unlimited amount of money. What it means is that once you’ve used up your full basic entitlement, your bonus entitlement kicks in. You must still qualify for the loan and your lender will look at your income, credit score, debts, and credit history to determine how much they will lend you.
Full Entitlement
Full Entitlement
When you have full entitlement, none of your entitlement is tied up in another property, and your full entitlement is available to purchase a home as long as the borrow can qualify for the loan. You probably have full entitlement if you meet at least one of the following criteria:
You’ve never used your VA home loan benefits
You paid off a prior VA loan and sold the property it was attached to
You had a foreclosure on a prior VA loan but paid it in full
How much money is considered Full Entitlement?
How much money is considered Full Entitlement?
To stay competitive and ensure Veterans across the country have access to homeownership, the VA started to link its guaranty amounts with the conforming loan limit for conventional financing. Conventional or conforming loan limits changed for 2024 and are now $766,550 for a one-unit property in the USA. If you have full entitlement, the VA will guarantee up to 25% of your loan amount – even if it exceeds the conforming loan limit in the county where you want to buy a home.
Basic Entitlement
Basic Entitlement
If you have full entitlement, your COE will say, “This veteran’s basic entitlement is $36,000." Which is 25% of 144,000. It’s important to note that the $36,000 isn’t a limit on how much you can borrow or how much the VA will guarantee. It is simply the limit of loans under $144,000, the VA will guarantee 25% of the loan amount up to $36,000 and it is an indicator that the veteran is eligible for Full Entitlement.
Your maximum depends on how much entitlement you have. If you have full entitlement, you don’t have a VA loan limit as long as the borrower can qualify for the loan. You’ll get 100% financing as long as you plan to borrow more than $144,000.
Let's break it down: Basic Entitlement
Let's break it down: Basic Entitlement
If you were looking at a mortgage for a loan amount of $144,000 or less then the max amount of entitlement you can use is $36,000 (25% of $144,000 = 36,000).
If you plan to buy a home with a loan amount that is greater than $144,000 then your bonus entitlement kicks in.
Reduced Entitlement
Reduced Entitlement
Homeowners with active VA mortgages on their property have reduced or partial entitlement. If your entitlement is reduced, the VA will only guarantee up to 25% of the county’s conforming loan limit, minus the amount of your entitlement you’ve already used. You may have partial entitlement if you meet at least one of the following criteria:
You’re currently paying back a VA loan
You’ve repaid your loan but still own the home you purchased with the loan
You defaulted on a previous VA loan
In most cases, homeowners simply sell their current VA-backed property and then regain their full entitlement by completing a VA restoration of entitlement. It is important to note that you do not have to have full entitlement to get a second VA loan. To understand how this is possible, you need to understand how Bonus entitlement kicks in.
Bonus entitlement
Bonus entitlement
Bonus entitlement is the dollar amount that bridges the gap between the basic entitlement amount of $36,000 and a 25% of your loan amount over $144,000.
Let's break it down: Bonus Entitlement
Let's break it down: Bonus Entitlement
If you were looking at a mortgage for $450,000 and didn’t want to provide a down payment, you would use $112,500 worth of your entitlement (25% of $450,000). In this case, your bonus entitlement would be $76,500 ($112,500 – $36,000).
What is an FHA Loan?
What is an FHA Loan?
FHA loans are a popular option for homebuyers, especially those who have a lower credit score or don't have a large down payment. One of the most significant advantages of an FHA loan is the lower credit score requirement. While most conventional loans require a credit score of at least 620, FHA loans can be obtained with a credit score as low as 580 and sometimes less.
Another advantage of an FHA loan is the low down payment requirement, which is currently set at 3.5% of the purchase price with fico scores above 580. This can be an attractive option for first-time homebuyers who may not have a lot of savings to put toward a down payment.
However, it's important to note that FHA loans do require borrowers to pay mortgage insurance premiums (MIP). MIP is a type of insurance that protects the lender in case the borrower defaults on the loan. The amount of MIP required will depend on the size of the loan and the size of the down payment.
If you're interested in an FHA loan, it's essential to work with a knowledgeable mortgage professional who can help you understand the pros and cons of this type of loan and guide you through the application process. At Synergy Capital Lending, Inc., we have extensive experience helping clients obtain FHA loans and can provide you with the support and guidance you need to make informed decisions about your mortgage.
What is a Jumbo Loan?
What is a Jumbo Loan?
Jumbo loans are a type of non-conforming loan that exceeds the maximum county loan limit set by Fannie Mae and Freddie Mac. The loan limits differ per county. Jumbo loans are designed for borrowers who need to borrow more money than the conforming loan limit allows.
Jumbo loans typically require a higher credit score, a larger down payment, and a lower debt-to-income ratio than conforming loans. However, jumbo loans can also offer competitive interest rates and flexible terms.
At Synergy Capital Lending, Inc., we offer jumbo loans up to $5 million with competitive rates and terms. Our experienced loan officers can guide you through the application process and help you find the best jumbo loan for your unique financial situation. Contact us today to learn more about jumbo loans and how we can help you.
What is a USDA Rural Housing Loan?
What is a USDA Rural Housing Loan?
A USDA rural housing loan is a type of mortgage loan offered by the United States Department of Agriculture (USDA) that is designed to help borrowers purchase a home in certain rural and suburban areas. These loans are backed by the USDA and are available to eligible individuals with low to moderate incomes.
One of the key benefits of a USDA rural housing loan is that it typically requires no down payment, which can make it easier for borrowers to qualify for a loan. However, there are income and credit requirements that must be met in order to be eligible for this type of loan.
In terms of income restrictions, the USDA sets limits on how much money a borrower can earn in order to qualify for a rural housing loan. These limits vary depending on the location of the property and the size of the borrower's household but generally range from around $86,000 to $146,000 for a family of four.
As for credit requirements, borrowers will typically need a credit score of at least 640 in order to be eligible for a USDA rural housing loan. However, it's worth noting that credit requirements can vary depending on the lender and other factors, so it's a good idea to speak with a mortgage broker or lender to get a better understanding of the specific requirements.
In order to determine whether a specific property is located in an approved USDA rural housing area, borrowers can use the USDA's eligibility map. This map allows users to enter an address or location to see if it falls within an approved rural area. Here's the link to the USDA's eligibility map:
What is a 3-2-1 Buydown Mortgage?
What is a 3-2-1 Buydown Mortgage?
A 3,2,1 buydown is a type of mortgage financing option that allows borrowers to temporarily reduce their monthly mortgage payments during the early years of the loan. It involves paying additional upfront fees or points at closing to obtain a lower interest rate for the first three years of the mortgage term.
After the initial three years, your mortgage payments will no longer be subject to the buydown, and the interest rate will revert to the original rate agreed upon in your mortgage contract. It's important to note that the duration and terms of the buydown can vary depending on the specific mortgage program and lender you choose.
The advantage of a 3,2,1 buydown is that it allows borrowers to ease into homeownership by offering lower initial monthly payments, which can be particularly beneficial if you expect your income to increase in the coming years. It provides some financial flexibility during the early stages of your mortgage term.
Additionally, the fees associated with the buydown can be covered by the seller. This means that the seller, as part of the negotiation process, may agree to pay the upfront fees required for the buydown. This arrangement can further reduce your out-of-pocket expenses when purchasing a home.
As a mortgage broker, I can help you navigate the details of a 3,2,1 buydown and work with you to find the best mortgage option that suits your needs and financial goals.
How does the buydown work?
How does the buydown work?
In the first year of the mortgage, the interest rate is reduced by three percentage points (3%). This means that your monthly mortgage payment will be significantly lower than what it would be with the original interest rate. The seller may cover the fees associated with this buydown, which can help you save money at the beginning of your mortgage term.
In the second year, the interest rate is reduced by two percentage points (2%). As a result, your monthly mortgage payment will still be lower than the original interest rate but slightly higher than the first year.
In the third year, the interest rate is reduced by one percentage point (1%). This adjustment leads to a slightly lower monthly payment compared to the second year but higher than the first year.
What is a Debt Service Coverage Ratio Loan?
What is a Debt Service Coverage Ratio Loan?
A DSCR (Debt Service Coverage Ratio) loan is a type of commercial real estate loan that is underwritten based on the cash flow of the property. This means that instead of focusing primarily on the creditworthiness of the borrower, as with a traditional commercial loan, the lender evaluates the property's ability to generate sufficient income to cover the loan payments.
To determine whether a property is eligible for a DSCR loan, the lender will calculate the DSCR, which is the property's net operating income divided by the debt service (principal and interest) of the loan. Typically, lenders require a minimum DSCR of 1.2 to 1.5, meaning that the property's net operating income must be at least 1.2 to 1.5 times greater than the debt service of the loan.
DSCR loans are often used to finance income-generating properties, such as apartment buildings, office buildings, and shopping centers. They can be a good option for borrowers who may not qualify for traditional commercial loans, but who have a property with strong cash flow.
It's important to note that DSCR loans may have higher interest rates and stricter underwriting requirements than traditional commercial loans, and they may require a larger down payment or more collateral. However, they can be a valuable financing tool for borrowers who have strong cash flow from their properties.
Dustin Fritz
Owner/Broker
850 Iron Point Rd.,
Suite #212,
Folsom, CA 95630
Office: (916) 459-1158
Cell: (916) 320-6845
Fax: (916) 258-0947
Company NMLS #8580, NMLS Consumer Access / CA BRE: 01867225 / ID Lic. #NBL-2080008580 / WA Lic. #CL-8580. License held in: CA, TX, ID, WA
For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply.
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