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Understanding Which Mortgage Loan Is Right for You: An Interview with Aadil Nathoo of AmeriPlus Financial

By Aadil Nathoo

Tell us a little bit about your company and the services you offer.

Ameriplus is a full service mortgage broker. We are licensed for 1st and 2nd primary, secondary, and investment properties. We offer Conventional, FHA, VA (we have our own Lender ID), RD (rural development) loans. We can originate new construction loans and all 4 primary renovations loans for FHA ( 203k and 203b) and Conventional (home Path Renovation). We also work with the Down Payment Assistance programs with Government/City/County funds.

What is one of the most important things for potential homeowners to know when they're starting to look at the different types of home loans?

Homeowner's need a good understanding of what types of loans which are truly available to them. Different loans have different down payment rules, Debt to income requirements, Fico requirements and sometimes you also need to have reserves after closing to even qualify.

Is there a common misconception about mortgages that you've seen first-time home buyers have?

Many believe that the mass advertising that there are many first time homebuyer programs that magically pay for down payment. FHA is for anyone, even if you own another home, and has a 3.5% down payment. First time home buyers often qualify for Conventional loans. There are some first time home buyer programs out there but the homes tend to be limited and specific with stricter guidelines.

How should people approach trying to understand the types of loans that are available to them and deciding which one is the best fit?

The first step is to work with a professional that will look at their credit, income, and assets. Their choices may be narrowed just by their credit score. There are not that many "true" choices left with the exit of the sub-prime market.

What are two or three of the most common types of loans that people apply for and the main benefit of each one?

Conventional: 5% down payment, lower mortgage insurance than FHA. Credit scores will determine the mortgage insurance monthly fee. The lower the fico score, the higher the interest rate and the higher the mortgage insurance. The conventional automated sytem (DU-Desktop Underwriting) will allow for no money left in bank account after closing for the higher credit scores. The rule of thumb is 2 months of reserves; 2 months of new mortgage payments. After foreclosure you need to wait 7 years.

FHA: 3.5% down payment. Highest mortgage insurance in the industry, but the rate tends to be .25% lower than conventional. The mortgage insurance is reduced slightly when you put 5% down and greatly reduced if you have a 15 year or less mortgage term. Credit score, unless you are below 640, barely makes the interest rate change. After foreclosure you only have to wait 3 years to be eligible for an FHA loan.

VA/RD, $0 down programs that you either have to be a veteran to apply for or live in a rural area.

What advice would you give to prospective home buyers who want a lot of flexibility with their mortgage?

Try to keep your credit the highest possible. Monitor service is a good idea in preparation for buying a new home. Conventional loans are hands down the cheapest monthly. However, not everyone can qualify and FHA is not a bad option. FHA has a new guideline that keeps the PMI for the life of the loan. End goal would be to refinance into a Conventional product when 20% equity is obtained.

What's the best way for people to reach you and your company?

Phone: 734.737.9600
Fax: 734-737-9599
Website: www.AmeriPlusFinancial.com

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NMLS# 171501
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Aadil Nathoo Lic.# 154013
KAZA2, Inc. dba AmeriPlus Financial Lic# 171501

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