Popular Home Loan Types
Now that you have an understanding of how much you can afford to borrow to buy your dream home, it’s time to determine which mortgage products may be right for you. Here are a few popular mortgage products:
While a fixed-rate mortgage will give you a rate that never changes, an adjustable-rate mortgage will offer a rate for the initial period and then adjust to a variable rate that changes annually.
Great low rates, either for the life of the loan (fixed) or the initial term (ARM)- No mortgage insurance with 20% down
- Flexibility for young homeowners to decide what term makes the most sense for their future plans
A Jumbo Loan is a non-conforming loan used for high-value homes that are above the conforming loan limits traditionally accepted by government-sponsored enterprises. This type of loan allows a borrower with a high credit score and healthy reserves to secure a Jumbo loan.
- Loan amounts up to $2 million
- Eliminates the need for secondary financing
- Allows buyers to finance more expensive properties in counties with lower conforming loan limits
- No prepayment penalties (even on ARMs)
These mortgages are insured by the government and offer more flexible lending guidelines than conventional loans.
- Low down payment requirements
- Allows a broader range of income, debt, and credit history than conventional mortgages
- Access to streamline refinancing program
These mortgages are reserved for US service members and their spouses.
- No down payment required
- No monthly mortgage insurance payment
- Typically lower interest rates than conventional loans
- Access to VA Streamline program
USDA Loans
These mortgages are also insured by the government and offer flexible and unique lending opportunities
* No down payment required
* Very low monthly mortgage insurance
* Typically or usually lower interest rates than Conventional and FHA loans
There are benefits to utilizing the USDA Loan but you and the Property Itself must Qualify in order to be utilized. This type of loan is normally available in Rural Areas but make sure to inquire to see if you qualify to use this type of loan.
Down Payment Assistance
Down Payment Assistance are most likely in the form of a loan. Although most of the Programs are Deferred Payments, they do have to be paid back. Some Programs are forgivable as long as you stay in the Property and or Keep the loan for as long as the Program states you may not have to pat the loan back. There are some Down Payment Assistance Programs that do come in the form of a Grant and do not have to be paid back. Like most down payment assistance program, there are qualifications that determine if you can receive the funding.
Some Programs are Specific to City and or County. Most times outside of qualifications, there is the question of available Funding. The most commonly asked qualifications but not limited to is: Credit Score and Income
Down Payment Assistance can be utilized with Conventional, FHA, USDA and Conventional Loans. You may ask if there are any Programs that you may qualify for and if there is available funding and we would be more than happy to assist.
Rehab Loans
These mortgages allow you to Purchase a home and make repairs or updates to the home and include the costs into the loan. This type of Loan may also be used as a Refinance of a home that you already own and make updates and repairs to the home.
The most popular of the Rehab Loans is a 203K loan. There are two types of 203k loan. If interested just inquire and we will explain the loan and how it can be utilized to fit your needs.
Investor Loans
We have a wide variety of Investment Products and Services. One of the most popular investor loans at this time is the DSCR Loan that allows an Investor to utilize the loan based on the Potential Rental Income that would be made from the property to pay for the loan.
Investor loans can be obtained the Traditional Full Documentation way or other ways like the DSCR, Bank Statements and even with Private or Hard Money Loans.
You may speak with one of our knowledgeable loan officers to answer questions or assist you with an Investment Loan.
Commonly Asked Question of Which Loan is Better
FHA vs. Conventional Loans
When you’re purchasing a home for the first time, it can be difficult to understand the differences between an FHA loan and a conventional mortgage. Let’s take a closer look and compare two of the most common mortgages on the market:
An FHA loan is a mortgage insured by the Federal Housing Administration.
FHA loans are a good option for first-time borrowers who don’t have a lot of funds available for a down payment or who need a loan with more flexible income requirements.
The FHA offers flexible lending standards, and down payments as low as 3.5%, making this loan an attractive option for first-time homebuyers.
An FHA loan requires two types of mortgage insurance: an upfront fee to be paid at closing and a monthly premium. In addition, you’ll be responsible for closing costs and fees.
A conventional mortgage is a home loan that conforms to a set of guidelines set by Freddie Mac and Fannie Mae
Conventional loans are geared toward homebuyers with larger down payments and good-to-excellent credit.
These loans may have shorter approval times. In some cases, mortgage insurance isn’t required.
Down payments on conventional loans are typically 3-20%. In addition, you’ll be responsible for closing costs and fees.