Conventional Loans, you may know them as Fannie Mae or Freddie Mac loans, are not insured by the government. The government instead sponsors theses entities by supplying liquidity to allow for the continous flow of credit. Conventional purchase loans typically require a minimum of 3% to 5% down payment. Purchase loans with less than a 20% down payment will normally require some type of mortgage insurance added to the payment.
FHA loans have been helping people become homeowners since 1934.
Some benefits of FHA loans are:
- Lower down payments
- Lower closing costs
- Easier credit qualifying
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties. They tend to be more lenient on areas such as credit, funds to close and co-borrowers.
FHA allows the borrower to get the funds necessary to close from several sources. They include such areas as personal savings, gifts, grants, loans from retirement accounts and seller contributions.
FHA requires both upfront and monthly mortgage insurance. Upfront mortgage insurance is added to the loan amount while monthly mortgage insurance is added to the monthly mortgage payment.
The USDA changed rules in 2009 that makes millions of Americans eligible for its rural mortgage programs. The American dream of home ownership has become more difficult as families struggle to come up with the 20% down payment that many conventional home loans require. With the USDA loan many are still able to get a zero down home loan.
VA mortgage loans are one of the best and safest methods to use when buying a home. Now even active duty personnel can qualify. If you are a Disabled Veteran, you may qualify for additional benefits on a VA home mortgage loan. The VA Home Mortgage Program does not limit the number of times a veteran may use the program.
VA mortgage loans extend to not only the Army, Navy, Air Force and Marines but also to Reservists and National Guardsmen.
Some benefits of the VA Mortgage Loan Program are:
• VA Mortgage Loans are guaranteed for no money down up to certain limits
• No monthly mortgage insurance is required
• All VA Mortgage Loans are assumable under certain conditions
• It is easier to qualify for a VA Loan than a conventional loan
• VA Mortgage Loans can be refinanced
No Money Down
You do not have to put any money down to qualify for a VA Home Mortgage Loan for up to certain limits. If the seller agrees to pay the closing costs, you may be able to purchase the home with no out of pocket cost. The loan and sales contract can be set up so that the VA Home Mortgage Loan covers 100% of the selling price and the seller covers the closing cost.
The VA Funding Fee
The Veterans Administration assesses a Funding Fee to all VA loans between .5% and 3.3% of the loan amount. The fee is added into the amount of the loan to be paid over the life of your VA home mortgage loan. The VA Funding Fee replaces the much higher priced Mortgage Insurance required when you get a conventional home loan. If you are a Disabled Veteran, you may qualify to get the fee waived completely.
Purchase or Refinance
All loan products noted above will allow for a purchase or refinance. FHA and VA offer a streamlined refinance product requiring limited documentation with some programs allowing for no credit qualification and no appraisal required.
Call today to find out which loan is best for you. Or, apply on secure online application and you could have your answer in as little as 15 minutes. Start HERE