CONVENTIONAL HOME LOANS
Conventional Loan Highlights
If you have good credit and stable income, a conventional loan might be the right option for you since it offers the following.
Lower Interest Rates for Borrowers with Good Credit
Flexible Mortgage Insurance Options
Fewer Penalties and Fees
Flexible Loan Terms
Conventional Home Loans Lower Rates with More Flexibility
A conventional mortgage refers to any loan that is not insured or guaranteed by the federal government, as opposed to government-insured loans including Federal Housing Administration (FHA), U.S. Department of Veteran Affairs (VA) and U.S. Department of Agriculture (USDA). Conventional mortgages (whether conforming or not) typically have a slightly higher down payment than government loans; however, this loan option normally provides more flexibility with fewer restrictions.
Conventional Loan Programs
An adjustable-rate mortgage (ARM) is a loan term option with interest rates that can change periodically after the initial fixed-rate period. After this introductory period, monthly payments are susceptible to increases or decreases based on market fluctuations, which can also affect the monthly payment. An ARM could be the right choice for you if you plan on staying in your home for just a few years, you’re expecting a future pay increase, or the current interest rate on a fixed-rate mortgage is too high.
Fixed-rate mortgages protect you against rising rates since the interest rate remains the same for the entire term of the loan. Plus, you have the option of selecting a 10, 15, 20, 25 or 30-year term. The main difference is the lower term options have higher monthly payments, which also means you are building home equity faster. Keep in mind you can use equity as a down payment for your next home or a future cash-out refinance. If you plan on staying in your home for a longer time frame, a fixed-rate mortgage could be the right solution for you.
A jumbo loan, or non-conforming mortgage, allows you to purchase more expensive homes with a loan amount above the conforming limit set by the Federal Housing Finance Agency. In most areas of the country, the conventional conforming loan limit is $548,250; however, the limit is $822,375 in higher cost areas. If you have a low debt-to-income (DTI) ratio and a higher credit score, but you don’t have enough funds to bring the loan amount under the conforming limit, a jumbo loan might be the right option for you.
Opening the Doors to Home Ownership
FHA Loan Highlights
FHA loans are widely used by first-time homebuyers and people with low-to-moderate incomes since this government-insured mortgage features the following.
Low Down Payments
Fixed- and Adjustable-Rate Mortgages
Loans for 1-4 Unit Properties and Condos May Be Available
Down Payment Funds Can Be a Gift From a Relative or Employer**
Home Sellers Can Contribute Up to 6% of the Closing Costs
FHA Loan Programs
FHA’s adjustable-rate mortgage (ARM) insures home purchases or refinances with rates that can change after the initial fixed-rate period. Depending on market fluctuations after this initial fixed-rate period, your monthly payments could change due to rates increasing or decreasing. An ARM could be the right choice for you if you plan on staying in your home for just a few years, you’re expecting a future pay increase, or the current interest rate on a fixed-rate mortgage is too high.
Fixed-rate mortgages protect you against rising rates since the interest rate remains the same for the entire term of the loan. With FHA loans, you can select a 30-, 20- or 15-year term. The main difference is the lower term options have higher monthly payments, which also means you are building home equity faster. Keep in mind you can use equity as a down payment for your next home or a future cash-out refinance. If you plan on staying in your home for a longer time frame, a fixed-rate mortgage could be the right solution for you.
If you currently have an FHA mortgage, we may be able to help you reduce your interest rate and lower your monthly mortgage payments with an FHA streamlined refinance. Plus, a streamlined refinance requires limited borrower credit documentation and underwriting for an even easier process. This may be the right solution if you want to convert your ARM to a fixed-rate loan.
Home loans backed by the Department of Veterans Affairs (VA) provide affordable home financing options for eligible Service Members, Veterans and surviving spouses. Options can include Adjustable-Rate Mortgages***, Fixed-Rate Mortgages, Cash-Out Refinancing, and Interest Rate Reduction Refinance Loans.
With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan–saving you time and money. Options can include HomeStyle Renovation Loans, Limited 203(k) Rehabilitation Mortgages, and Standard 203(k) Rehabilitation Mortgages.
With a refinance, you pay off your current loan with a new loan and restructure the mortgage to fit your needs. Options can include Cash-Out Refinance****, the Adjustable-Rate Mortgage (ARM), and Fixed-Rate Mortgages.
Invest in the Future You Deserve.
Not only do you deserve a perfect home, but one that will lead to a better future. We can help you get there.
* This article does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.
**Subject to underwriting review and approval.
****A down payment is required if the borrower does not have full VA entitlement, or if the loan amount is greater than $424,100.
*****By refinancing your existing loan, your total finance charges may be higher over the life of the loan. Appraised property value may affect loan amount.