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Conventional Mortgage-is not insured or guaranteed by the government. Private mortgage insurance would be needed on a conventional loan if 20% down payment is not made. A common conventional loan is a fixed-rate loan for 30 years or an an adjustable-rate mortage (ARM) where the interest rate adjusts during the life of the loan. Make sure you clearly understand the terms. Be aware of introductory low “teaser” rates. FHA mortgage-is insured by the Federal Housing Administration. Currently, in Bernalillo county, the FHA limit is $271,050 for a single-family home. A down payment of three and half percent can make homeownership a reality for many individuals. VA mortgage-is for eligible veterans for the purchase of a home that they intend to occupy. This is not available for investment properties. Having an eligibility does not automatically mean you will qualifiy for a VA loan. You must still meet lender guidelines for credit and income. The 2009 limit is $417,000. NM Real Estate Contract-is also referred to as an installment contract in other states. This is a form of seller financing in which the deed is held by an escrow agent until the contract is satisfied. A seller will usually pull your credit. If you have blemished credit, they may still finance you, but with an interest rate higher than traditional financing. If you have good credit, you should try for a lower interest rate than through a bank. Otherwise, you would most likely be better off with a traditional bank mortgage. Cash Purchasing-means you have sufficient cash to purchase without financing. While this sounds like a great way to go, consider the value of your money. If you are able to get a loan for six percent and your money is returning more, then paying cash will cost you more in the long run. For more information on home financing, visit my Albuquerque Mortgage Page. |
When purchasing a home in New Mexico, Paragraph 7 of the NM Purchase Agreement deals with the financing of a home. Several options are available to the buyer.