Mortgages on the surface can be an intimidating subject. We've collected information to give you a better understanding of your options before purchasing your dream home. 

FHA

If you are a first-time homebuyer, have less than perfect credit or are looking for a low down payment loan, an FHA loan may be right for you.

An FHA mortgage is a government-backed home loan with more flexible lending requirements than those for conventional loans. Because of this, interest rates for FHA mortgages may be somewhat higher, and the buyer may need to pay monthly mortgage insurance premiums along with their monthly loan payments.

FHA loans are insured by the Federal Housing Administration (FHA) and may have an easier qualification process due to less stringent down-payment and credit requirements than conventional mortgages. 

Lower down payments
An FHA mortgage may require a low down payment, although the interest rate may be somewhat higher than with a conventional mortgage.

Lower credit thresholds
One of the benefits of the FHA loan program is that home buyers may qualify even without a long credit history or outstanding credit.

Popular for refinancing
Many borrowers with newly adjusting ARMs look to refinance into fixed-rate FHA loans. 

VA

 

The Department of Veterans Affairs created the [ VA ] loan to make it easier for veterans and active duty to purchase a home. What makes the VA loan so special is that if you qualify, you can purchase a home for no money down.

 

The Department of Veterans Affairs created the [ VA ] loan to make it easier for veterans and active duty to purchase a home. What makes the VA loan so special is that if you qualify, you can purchase a home for no money down. Generating tens of thousands of dollars for a conventional home loan down payment can be a huge challenge for anyone, but that is no longer a hurdle from home ownership if you qualify for a VA loan.

Beyond not having a down payment, the financial requirements with a VA loan are lot less strict when compared to a conventional home loan. With a VA loan you do not need to have perfect credit nor a long credit history. You do however need to meet the minimum service requirement set by the Veteran Affairs Department. There are fewer fees because you’re able to avoid factors associated with other loans programs, like private mortgage insurance, that can save you money.

Conventional

The Conventional Purchase program is a great option when you are looking to purchase a new home as a primary residence, second home or investment property. These types of loans are generally below the standard conventional loan limit of $484,350 in 2019 for a single family residence and make up the majority of home loans sold in America today. There are also established guidelines required for credit scores, income, work history, and minimum down payments.

What Are the Advantages of Conventional Loans?

* Gift funds OK
* Low minimum down payment available
* No prepayment penalty ever
* 30yr, 25yr, 20yr, 15yr, or 10yr terms
* With or without mortgage insurance

Jumbo Loans

Jumbo mortgages are home loans that exceed conforming loan limits. A jumbo loan is one way to buy a high-priced or luxury home. If you have a lower debt-to-income ratio and a higher credit score, a jumbo loan may be right for you. The standard limit on conforming loans for 2019 is $484,350 in most areas of the country, but jumbo mortgages can exceed these limits.

 

Non-Qualified Mortgage

A Non-qualified Mortgage (Non-QM) is the category that covers all those loans that don’t fit the traditional mortgage of Conventional, FHA, VA or USDA characteristics. Therefore, it accommodates people who do not have the standard documentation to prove that they are capable of making those mortgage payments. If you do not fit into the conforming model but still have the credentials like sizable assets or a big, if sporadic income, you can qualify for a Non-QM.