Understand Your Loan Program

Understand Your Loan Program

You must understand the loan programs your loan officer is suggesting to you. Otherwise, you may be ill advised and go with the wrong program. One thing to take note of is what type of loan that your loan officer is suggesting. Specifically, is it an FHA loan or a Fannie Mae loan?

It is important to know the difference between these two, as they can make a significant difference in the mortgage process. For example, the FHA requires a down payment of 3.5 percent, whereas Fannie Mae requires a down payment of 3 percent. You should always ask your loan officer why they are suggesting you take the type of loan they mention. What many people do not know is that officers will oftentimes try to take the easier route when it comes to loans, which may be an FHA loan. Obviously, you need to be cautious of what your loan officer suggests, as it may be more in favor of their personal best interests than it is for you.

How does one loan benefit the loan officer over another? Oftentimes, it is more profitable for the lender to offer you an FHA loan as opposed to a Fannie Mae loan. In this can see why you are advised to be cautious why discussing what type of loan program you will use with your loan officer. Loan officers also tend to not explain why the loan that they recommend is the best option to go with. In this case, be sure to ask for clarification, so you can be sure that you are getting the right type of loan for you.

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