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  • About
    • All About Theory
    • Meet the Team
    • Theory Companies
    • Theory Cares
    • Fill The Barrel
    • Blog
  • Buy
    • Buy With Theory
    • 2023 Homebuyer Guide
    • 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
  • Invest
    • Theory Investments
    • Theory Self-Directed IRA
  • Construction
  • Property Management
  • 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

“

“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

“

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

Rhonda & Rickey Wilks - Buckley

“

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

THIS Saturday!! The path to becoming a homeowner s THIS Saturday!! The path to becoming a homeowner starts with getting WSHFC Certified for Down Payment Assistance & learning EVERYTHING you need to know about how to turn your dreams into a reality 💡Our very own Nickie Robbs along with Katie Arnold from Evergreen Home Loans will be your experts for the day as they answer questions, clarify myths, & provide the roadmap you need 😎Snacks will be provided, and the class will be held IN PERSON from 10AM - 4PM! Successful completion earns you official WSHFC Certification for Down Payment Assistance Programs in WA State 🏡 💰If you'd like to attend, please email karnold@evergreenhomeloans.com!📍 217 N Meridian, Puyallup (next to Meridian Cafe and Trackside Pizza, parking is in the back)
🗓 Saturday, May 27th
⏰ 10AM - 4PM
Happy Birthday to Jessica Helms, our Assistant Pro Happy Birthday to Jessica Helms, our Assistant Property Manager with Love My Space! She's been with us for the last 6 months and has been a truly wonderful person to have around. She gets stuff done and has become an invaluable member of the team! Happy Birthday Jessica, we hope you have an amazing day 🥳 🧁
Started the week off right yesterday with a class Started the week off right yesterday with a class from our CFO Erik about personal finance! He talked all about how to set up yourself and your family for a less financially stressful life, from now through retirement. We're always looking for ways like this to help bring extra value to our Team on a regular basis 😎The biggest takeaway from the class? Every great budget starts with a specific, well thought out system. And if you're curious to learn more about how to make THAT happen, you might just have to join our team and come to the next one 😉
Today we're celebrating the birthday of the one-an Today we're celebrating the birthday of the one-and-only Madison "Two Hands" Magruder! Mads has been around since just about the beginning, and was an integral part of the company throughout its early years. We're blessed to have her hang her RE license with us still, and we wish her the best possible day 🙌🥳💃
Happy Birthday, Rizwan! 🎂 We hope you have the Happy Birthday, Rizwan! 🎂 We hope you have the most special day!!
If I were you, I wouldn't pass on this charming Cr If I were you, I wouldn't pass on this charming Craftsman home in Aberdeen with an unmatchable value that you won’t find at this price!!📍 2215 Cherry St
💰 $345,000
👣 1,743
🛏 4
🛁 1.75This beauty features a HEATED 720SQFT SHOP WITH LOFT along with an attached 2-car garage & NEW ELECTRIC PANEL! On the main floor you will find the large Primary BR w/ slider to the back deck – as well as an additional BR, Bath and den/office space. 2 Beds & 1 Bath upstairs. Truly one of a kind, displaying handcrafted woodwork throughout: revitalized fir floors, redwood & old-age cedar counter tops, knotty pine ceilings, exposed post and beam, and custom fencing surrounding the property for added privacy. Driveway/street parking in front, alley access with SECURE GATED ENTRY, RV parking; enough for 6+ vehicles in back! Immaculate landscaping with back deck/patio.
RUN! Dont Walk to take a look at this stunner in p RUN! Dont Walk to take a look at this stunner in person!📍 5024 84th Avenue W
💰 $690,000
👣 2,206 sqft
🛏 4
🛁 3Welcome to this stunning mid-century modern home ideally situated on a serene dead-end street in desirable University Place! With 4 beds, 2.5 baths, multiple living spaces each with a fireplace, fenced back yard, front courtyard, and a 2-car garage, it's really easy to just come home and relax! The open kitchen seamlessly blends with the dining space, creating an inviting atmosphere & the primary bedroom is large & offers an en suite! Don't forget about the AC keeping you cool this summer! The location of this home in UP is highly desirable, offering a peaceful neighborhood ambience while being just moments away from urban conveniences. Nearby, you'll find great schools, trendy shops, delicious restaurants, and picturesque parks!
Incredibly inspiring night with Mike Smith! What w Incredibly inspiring night with Mike Smith! What was your favorite takeaway from this month's Tacoma Connect? 👇

Office

5413 South Tacoma Way
Tacoma, WA 98409

Phone

253-537-HOME

Email

hello@theoryRE.com

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