Last month our trivia question was, “Of the four main ways to purchase a house (VA, FHA, or Conventional loans, or cash) what percentage of each type was used by buyers to purchase homes in Hampton Roads in 2023?” The answers in order from the most popular to least based on percentage are: VA (Veteran Affairs) – 35.43%, Conventional – 30.66%, Cash – 18.27%, and FHA (Federal Housing Authority) – 12.95%. Here is a link to last month’s newsletter discussing the basics of the different types of loans.
These loan percentages are based on the home sales across Hampton Roads in 2023 and are limited to the sales of homes that sold for $766,600 or less. We chose to cap the price at $766,600 because anything above that results in a much worse interest rate when using a VA loan. Our parameters cover up to 96% of all of the sales across Hampton Roads. For reference, conventional loans made up 49% of all of the sales above $766,600.
There are many different types of conventional loans. Today you can get a conventional loan with as little as 3% down (some credit unions even have a zero down conventional loan), which has increased the use of conventional loans across the board.
In general, FHA and VA loans have tighter lending standards about the overall condition of the home. In most cases, conventional lending standards will allow minor repair items to pass that would prevent a VA or FHA loan from closing. If a home is in reasonably good shape, assuming someone is eligible, a VA loan (if buyer is eligible) is really hard to beat from a buyer’s perspective.
One of things we often tell both buyers and sellers is at the end of the day you really have to convince two different “people” to agree to buy a house. The buyer and the lender. While the lender isn’t a person, if the lender doesn’t agree to finance the purchase the sale isn’t going to happen.
As you can see, when you are buying or selling a house there are a lot of moving parts and decisions to be made. Give us a call (757-726-7653 for Lee, 757-434-9084 for Harry) or reply back to this email and we will be happy to talk through your individual situation. We love real estate and are always happy to talk.
Click HERE for previous editions of this newsletter
Cross Realty Rental Property Management
Don’t forget, we manage rental properties and can help with your property management needs as well!
Check out the Rental Management section of our website, here.
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