Who decides what type of mortgage (i.e. conv/fha/va) a property can be purchased with?
The buyer should always decide what type of financing is used. ALWAYS !!!!!!!!!!
A skilled and experienced Mortgage Banker's job is to gather information from a prospective buyer and provide information regarding financing options. The mortgage banker should consider the desired down payment and budgeted monthly payment. In addition to the condsideration of lenders' guidelines for qualification, the lender should analize the borrowers ability to maintain the proposed payment. Armed with this information, options should be discussed in detail with the buyer.
So many of the problems we've seen in the past couple of years were caused by a careless disregard to this exact question. In too many cases the lender or realtor chose the loan program without full education of the buyer.
Remember: The mortgage is the obligation of the buyer. If the financing is not within the comfort zone of the consumer, the transaction should not close.
Never, Never, Never buy a property without knowing exactly what you're obligated to.
This is a very good question and goes to the heart of mortgage professionals operating in the borrower's best interest.
Often the situation dictates the loan program, for example if a buyer only has 3.5% for a down payment, then a conventional loan is not an option, they would have to go FHA, or perhaps with a state managed housing bond program. Obviously if a buyer is not a veteran then VA is not an option, or if the veteran has a large down payment available then a VA loan may not be the right product for them. There are many factors to go into product selection, we start with underwriting guidelines to insure that the loan will meet requirements and be approved for the borrower, then we look at program features such as rates and fees for the particular scenario.
A good loan officer will do a thorough review of a borrowers financial situation and then present mortgage solutions. You should request a detailed side by side comparison of mortgage options so that you can see the variations between programs in black and white. It is important to look not only at rates, but mortgage insurance costs, closing costs and other requirements. Very often from the start we know what offering will be best for a consumer's particular situation, sometimes we need to look at the big picture and assist in reviewing options and providing the education necessary in order to empower the consumer to make smart mortgage decisions.