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  • Home
  • About
    • All About Theory
    • Meet the Team
    • Theory Companies
    • Theory Cares
    • Fill The Barrel
  • Buy
    • Buy With Theory
    • 2022 Homebuyer Guide
    • Virtual Home Buyer Bus Tour
    • Your Guide to the PNW
    • Featured Listings
    • Home Search
    • Sign In
  • Sell
    • Sell With Theory
    • Free Home Estimate
    • 1 Hour Cash Offer
    • Sold By Theory
  • Blog
  • Careers
  • Contact

Home Financing 101

Ever wonder which home loan is right for you? As a prospective home buyer, it may seem obvious that you should research the neighborhoods you want to live in. However, you should also research the types of financing available to you. Deciding which type of mortgage best suits your needs, and if you can use down payment assistance programs, will help direct you to the type of home you can afford.

When thinking about financing a home, there are 3 important factors to consider:

#1 Programs
#2 Down Payment Assistance
#3 Monthly Payment

#1. Programs

Ever wonder which home loan is right for you?

There are several loan programs that exist, and many variations of each.

The first we’ll discuss is an FHA Loan. This is backed by the Federal Housing Administration. Borrowers with smaller down payments and lower credit scores are great candidates for this type of loan. Many first-time home buyers who can’t qualify for a conventional loan use an FHA loan.

Another excellent loan option is a Conventional Loan. These loans are a good match for borrowers who have a strong credit history, stable employment history, minimal debt, and enough funds to put down at least 3%. Unlike government-backed loans, you can use this loan to finance nearly any type of property, including primary residences, vacation homes, or investment properties.

Moving right along to another fantastic loan option: a VA Loan. This loan is backed by the Veteran’s Administration and is meant for active-duty military members, reservists, and veterans. These loans don’t require a down payment and don’t have a minimum credit score requirement (lenders can make that determination case-by-case).

Last, but definitely not least, is a USDA Loan. This loan program is a United States Department of Agriculture loan. It is another great zero down loan program for people looking to move into a home in more rural areas.

Two things to consider for a USDA loan are:

  1. Rural areas only, which means the property has to be in a certain location in order to qualify.
  2. AND income caps, which mean you have to make under a certain amount in order qualify.

 

#2. Down Payment Assistance

Ever wonder which home loan is right for you?

Down payment assistance (DPA) helps home buyers with grants or low-interest loans, reducing the amount they need to save for a down payment. In addition, you can pair a DPA with several loan options.

Requirements to qualify for down payment assistance vary by state, but here are the typical ones:

  • First-time home buyers only (or those that haven’t owned a home in the last three years)
  • Buyers must have low to moderate income
  • The home will be a primary residence
  • The home is within local purchase price limits
  • The DPA is used in conjunction with an approved mortgage program
  • You work with an approved mortgage lender

 

#3. Monthly Payments

There are several factors you should be aware of that make up your monthly loan payment on a home:

Principal and Interest – This amount goes to pay both the amount that you owe the bank, as well as the cost to borrow it.

Taxes – This cost will vary property to property depending on how the county determined the cost for the specific parcel.

Home Owners Insurance – Every property requires this. It protects you and the lender if something were to happen to your property.

Mortgage Insurance – Mortgage Insurance is a lender’s insurance policy in case of default. Typically, every loan will require mortgage insurance in some form unless you have 20% equity. Each loan program has a different name and cost for this. There are many options depending on your loan program, so it is best to go over mortgage insurance with your lender specifically.

Home Owner Association Dues – This is the only item on this list that is not directly a part of your mortgage payment. If your property has an HOA, you will pay directly to the HOA and it will be a separate payment from your monthly bill.

 

We hope that you now know a little more about financing a home and aren’t left to wonder which home loan is right for you. Your next step is to chat with a lender! Ready to get qualified today and start your home search? Contact us at 253-357-HOME or email  hello@theoryre.com

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“I think that’s the easiest it’s ever been for me to buy or sell a home!”

Brad Rasmussen -

“

We had a distressed property in Tacoma that required a lot of repair before we could sell. The task soon became overwhelming and that’s when we contacted Theory Real Estate.  They purchased the property “as is”. Within 3 weeks,  we closed on the deal. The Theory team is amazing!!  Every person we came in contact with was friendly, professional and efficient.

John and Diane Simchuk -

“

We are new investors to this market. We met Isaac and Alan through a good friend, and we are so thankful to have met them. They are the nicest, caring, most professional, kind-hearted people we have met in a long time. We would recommend these guys to ANYONE.

Anthony & Sarah Wooden - Tacoma

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We have bought 2 homes and sold 1 home with Theory. We would recommend them to all our friends.

Rhonda & Rickey Wilks - Buckley

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We worked with Theory to find our perfect house, but ran into a couple obstacles with the seller. The Theory team was always there with answers and went above and beyond all of our expectations.

Ceirra & Kenny Williams - Spanaway

LET'S GET SOCIAL

Stay safe out there, have fun, and respect your ne Stay safe out there, have fun, and respect your neighbors 🇺🇸 💥
In June we only had two Theory anniversaries, but In June we only had two Theory anniversaries, but it's two big ones! Alline has become an absolute rock on our team. In addition to being a fantastic agent & investor she has also been helping us out with a TON of financial work and has been hugely valuable. As for Jay, it's hard to believe he's already been here 4 years but time flies when you're having fun! He too has become an excellent agent & investor over these years, is always making moves, and knows how to grind 💯Thank you both for all you've done 🙌 🥳
2.5 acres, TWO primary bedrooms with a split floor 2.5 acres, TWO primary bedrooms with a split floor plan, THREE full baths, vaulted ceilings, a gorgeous lot surrounded by greenery, and we're just getting started! This house in Olalla is absolutely LOADED with features & perks 😎📍 6585 SE 160th St, Olalla
👣 1,980 SqFt
🛏 4 Beds
🛁 3 Baths
💰 $449,000This home has TWO primary bedrooms with a split floor plan, allowing for easy multi-generational living! Say goodbye to fights over who gets to get ready first, you've got THREE FULL baths! Say hello to your vaulted ceiling & skylights over your huge open kitchen & large pantry. You'll be the talk of all your friends with 2.5 level acres for all your toys, RV parking, gardening, & entertainment needs. But wait, there's more! It is on a street with gorgeous custom-built homes -- is it time to build yours & use this as your income-generating ADU? Whatever you do, you'll be doing it in loads of privacy as you're located on an easement road off of 160th. Close to everything in Gig Harbor, too!If you're interested in this home, contact Jamie at 253-792-9402!
Picture living on a waterfront home with lake view Picture living on a waterfront home with lake views from multiple rooms & surrounded by tranquil forest! It's vacation style living year round 🤩📍 22222 Bluewater Dr SE, Yelm
👣 1,918 SqFt
🛏 3 Beds
🛁 2.5 Baths
💰 $400,000Imagine yourself enjoying the lake view from your living room & dining room, relaxing on one of the many community beaches, strolling along the 14 miles of trails, entertaining on your deck, or enjoying a good conversation around your fire pit! This home is surrounded by GORGEOUS nature & situated on a large lot with almost 2000sf of space to sprawl, including a den + bonus room on main AND an additional bonus room on the lower level!If you're interested in this home, contact Carlos at 253-617-9202!
Hey South Tacoma Residents, we want to hear from y Hey South Tacoma Residents, we want to hear from you! Tell us what you'd like to see more of in our community by filling out the survey at the link in our bioThe survey can be submitted anonymously, or with your contact info if you'd like to be entered to win a $100 gift card to a STW restaurant of your choice!We truly appreciate any and all feedback or ideas you can give us. We love this area & its people, and we want to help the community grow as South Tacoma continues its epic rise to destiny!Thank you,The Theory Team**Gift card winner to be drawn at random on 7/15/2022, the contest is not in any way affiliated with Facebook, Instagram, Meta, or other associated entities**
It's a double birthday!! Two complete legends at T It's a double birthday!! Two complete legends at Theory. The man himself Alan Miller who helped found the company and has worked tirelessly growing it into what it is today, and an absolute ACE among aces Jamie Mc Donnell who is fresh off winning South Sound Magazine's Best Agent of 2022 award and has been killing it for Theory since the day she joined 🔥Happy birthday you two!! We hope you both have incredible days celebrating 🥳 🧁
It's already been 3 months since we hosted this aw It's already been 3 months since we hosted this awesome Powerhouse Women In Real Estate event 🔥 🔥The turnout was amazing and the room was buzzing hearing incredible entrepreneurs & business owners share their stories about how they've acheived success as women in real estate! Should we do more events like this?? 🤔
Happy Birthday to one of the nicest guys you'll ev Happy Birthday to one of the nicest guys you'll ever meet, Davis Higginson an agent here at Theory! He has been an absolute joy to have because in addition to being a phenomenal agent, he's always got a big smile and his face and is exceedingly friendly to be around. He's a great person to work with & know, and we're lucky to have him on the team! Have an amazing day celebrating, Davis 🥳 🧁
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