Conventional loans are sometimes more lenient with appraisal and condition of the property. When you are buying a “fixer upper” you may need to use a conventional loan. Homes purchased above the FHA loan limit are usually financed with conventional loans. If the purchase has a higher than 80% loan-to-value ratio, property mortgage insurance (“PMI”) may be required.
A VA loan is a loan specific for veterans who have served at least 180 days active service. VA loans are guaranteed by the Veterans Administration.
A reverse mortgage or home equity conversion mortgage is a special type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance.
FHA loans are loans that offer a low down payment and are typically easier to qualify for than conventional loans. They are insured by the Federal Housing Administration under the Dept. of Housing and Urban Development (H.U.D.). A down payment of 3.5% is required, based on purchase price or appraised value (lesser of the two). Non-occupying co-borrowers are allowed (perfect for college students). Down payment and closing cost may be gifted by a family member.
USDA Rural Financing
USDA rural financing is 100% financing with 30 year fixed rates and flexible credit guidelines. Income/property eligibility. Guarantee fee may be financed.
Balloon Payment Loan
A balloon payment loan is a fixed rate loan that is amortized over 30 years but becomes due at the end of a certain time. May be extendable or may roll-over into another type of loan.
Buy-Down loans are fixed rate loans where the interest rate and the payment are reduced to a specific period of time by paying the interest up front to subsidize the loan payment.
Community Home Buyer’s Program
Community home buyer programs offer fixed rate loans for first time buyers with a low down payment, usually 3-5%, no cash reserve required and easier qualifying ratios. Subject to borrower meeting income limits and attendance of a four hour training course on home ownership.
Fixed Rate Loan
A fixed rate loan has one interest rate that remains constant through-out the life of the loan.
Adjustable Rate Mortgage
Adjustable rate mortgages have an interest rate that is adjusted at certain intervals based on a specific index during the life of the loan.
Non-Qualifying Loan (Assumable)
Non- Qualifying loans are pre-existing loans which can be assumed by a buyer from the seller of a property without going through the qualifying process. The buyer pays the seller for their equity and then starts making payments
Graduated Payment Mortgage
A graduated payment mortgage is a fixed rate loan that has payments starting lower than a standard fixed rate loan, which then increase by a predetermined amount each year for a set number of years.
- Up to $35,000 in repairs
- No structural repairs
- Can be used for a refinance
- No minimum repairs
- Contractors: 2 draws
- Structural repairs allowed
- FHA consultant required
- Contractor: 5 draws
- Up to 6 months principal, interest, taxes, and insurance can be included if property is not occupied
- LTV can be up to 110% of the after improved value, comps must support the value