Looking for home loan options that fit your specific needs? Below is a brief overview of the different home loan options available. If you have questions regarding how any of these loan programs work, I’ll be glad to explain these to you in detail. Simply contact me and let me know how I can be of service.
Federal Housing Administration- FHA loans provide buyers with a low-cost insured home mortgage loan that fits the needs of many homebuyers and homeowners wanting to refinance their mortgage at lower rates. Whether you are buying a property or refinancing your current mortgage, FHA loans may be the right choice for you.
Of all the home loan options FHA loans are a good choice for those without perfect credit, want to minimize down payment, lower monthly mortgage payments, don’t want your mortgage to increase, concerns with qualification, security when you fall behind on mortgage payments, and for first-time home buyers.
FHA loans are offered as fixed rate loans and adjustable rate mortgage- ARM loans.
Conventional loans are referred as a mortgage loan that follows guidelines set by Government Sponsored Enterprises (GSE’s) such as Fannie Mae and Freddie Mac. Conventional loans are not guaranteed or insured by the federal government and may either be conforming or non-conforming. Conforming simply means that the loan follows the terms and conditions of Fannie Mae and Freddie Mac. Non-conforming loans are mortgage loans that do not meet the guidelines of Fannie Mae and Freddie Mac, but are still considered conventional loans. Conventional loans provide added security with individuals that have lower credit scores, have multiple properties, and have available from 3%-20% down payment which provides buyers with lower closing costs and flexible mortgage payment options.
Conventional loans are offered as fixed rate loans and adjustable rate mortgage- ARM loans.
HomePath mortgage loans provide buyers the opportunity to purchase a Fannie Mae owned property with a super low down payment, flexible mortgage terms, no mortgage insurance, and there is no lender-requested appraisal required to purchase a property. HomePath loans offer expanded seller contributions to closing costs making this loan ideal for first time homeowners or anyone that wants to minimize upfront loan fees and closing costs.
HomePath loans are offered as fixed rate loans, adjustable rate (ARM) loans, and interest-only loans.
Veterans Administration- VA loans are low-cost insured home mortgage loans that provide many benefits that veterans of the Armed Services won’t find in other home loan options. VA loans are credit flexible, offer low interest rates, no down payment and no mortgage interest. VA does charge an upfront VA funding fee which may also be financed unless the veteran is in receipt of VA service connect monthly disability payments in this case they will not be required to pay a VA funding fee.
VA loans are offered as fixed rate loans, graduated payment mortgage, growing equity mortgage, adjustable rate mortgage- ARM loans, and hybrid ARM loans.
USDA Loans- Rural Housing
USDA RD housing loans, short for United States Department of Agriculture and Rural Development offers homebuyers several benefits not available with other loan types. There are two loan types offered by USDA.
USDA guaranteed loan program offers borrowers with above average median income to obtain up to 100% loan-to-value (LTV) mortgage for their single-family home purchase. USDA guaranteed loan homebuyers are allotted up to 115% of the median household income set for their county.
USDA guaranteed loans are available as 30-year fixed-rate mortgage.
USDA direct loan mortgage loans are issued on a limited basis, which depends on the current funding allotted by the USDA. The USDA direct loan program provides homebuyers with below median or very low-income household the ability to buy a home in a rural area. USDA direct loans are available for single-family homebuyers.
USDA direct loan mortgages are available as 30-year fixed-rate mortgage.
Benefits of USDA loans include 100% financing option, low interest rates, no mortgage insurance, no money down and closing costs may be rolled into the loan amount it the property appraisal permits.
The maximum USDA home loan extended is 102% percent of the total appraised value of the property, which equals 100% percent of the sales price plus 2% guarantee fee.
USDA loans require that the subject property be occupied by the single-family owner and is only available in rural developments.
Hard Money Loans
Hard money loans are asset-based loans where a borrower receives funds secured by the value of the property being purchased. Hard money loans are generally offered from private investors or companies and are not government-insured loans. Uses for hard money loans include conventional commercial real estate and residential properties that require short-term funding. Due to this, most hard money loans typically carry higher interest rates. The benefits of a hard money loans are that credit will have little or no affect on loan approval, loan is available within 1-3 weeks on average and the borrower in most cases is not required to verify other available assets other than the real estate being collateralized. Hard money loans are generally 65-70% of the property value and terms are usually 1-5 years, which provides added security to the lender in the case the borrower is unable to repay the loan and the property results in foreclosure.
Bridge loans are a type of hard money loan used by homeowners who want to buy a new home prior to selling an existing home, but need the funding from the existing home. Bridge loans are used more often in a seller’s market than in a buyers market as the risk-association is lowered.
This article provides a brief overview of each of the home loan options available. For complete details contact me and I’ll answer any questions you may have.
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