IMAGINE THE POSSIBILITIES
We can help finance your vision and turn any house into the home of your dreams.
A conventional loan is a mortgage loan doesn’t have to be guaranteed or insured by the federal government. A subset of a conventional loan is a conforming loan, which has to meet the Fannie Mae and Freddie Mac funding criteria – mainly a dollar limit on the size of the loan.
Conforming loans are often confused with conventional loans/mortgages. Although the two types overlap, they are not the same. A conventional mortgage is a much broader category. It is any loan offered through a private lender, as opposed to a government agency like the FHA or the U.S. Department of Veterans Affairs (VA), and/or backed by Fannie Mae or Freddie Mac, which is where any overlap—and confusion—arises. The size of the loan doesn’t affect its conventionality, only its conformality. In effect, while all conforming loans are conventional, not all conventional loans qualify as conforming.
Mortgages that exceed the conforming loan limit are jumbo mortgages. The interest rates and minimum down payment for jumbo loans are typically higher because they carry greater risk for a lender.
| CONVENTIONAL LOANS | |
|---|---|
| LOAN TYPE | COMMON LOANS |
| Conventional Loan | Jumbo or Non-Agency |
| Conforming Conventional | Fannie or Freddie, 30 year fixed |
| Non-Qualifying Mortgage | Sub Prime |
What is the Conventional Loan Good for:
- Designed for well qualified borrowers with good credit
- Minimum credit score of 620, 720 score preferred
- 3% down programs available some restrictions apply please call for details
- 1st time home buyer programs with reduced MI available
- Single Family Homes, Multi Family Homes, Townhomes Attached or Detached, CONDOs, Properties with 10 acres or more and Manufactured Housing
- Primary, Vacation and Investment Properties
- MI required with less than 20% down, 100% gift allowed 9% seller contribution, MI will drop off
- Cash out refinance to 80%
A VA Loan is a mortgage loan issued by private lenders, such as banks and mortgage companies, and partially backed or guaranteed, by the Department of Veterans Affairs.
How a VA Loan Works
VA loans assist active service members, veterans, and surviving spouses to become homeowners. The home buyer presents a certificate of eligibility from the VA to the lender during the loan application. In most cases, VA loans are easier to qualify for than conventional loans.
The Veterans Administration offers a home loan guaranty benefit and other housing-related programs to help qualified veterans or their eligible family members buy, build, repair, retain or adapt a home for personal occupancy. VA loans offer up to 100% financing on the value of a home. VA loan recipients do not have to be first-time home buyers. Also, they may reuse the benefits and assign the loan to another qualifying person.
VA Loans Takeaways
The terms of VA loans are quite generous, compared to other mortgages. Among the benefits:
- Reserved for active and veteran service personnel and their families
- Minimum Credit Score of 580, 640 score preferred
- No down payment is mandated
- No private mortgage insurance premium requirement
- Closing costs are limited
- No prepayment penalty if the borrower pays off the loan early
- VA Funding Fee required and rolled into loan amount, waived if receiving VA Disability
- Can have multiple VA loans, if you have remaining eligibility
- Cash out refinance to 90%
- Non-qualifying refinance available
- Assistance is available from the VA to help borrowers avoid default
An FHA loan is a mortgage guaranteed by the Federal Housing Administration and issued by an FHA-approved lender. FHA loans are designed for low-to-moderate-income borrowers who may have lower than average credit scores. They require a lower minimum down payment and lower credit scores than many conventional loans.
Because of their many benefits, FHA loans are popular with first-time homebuyers.
Who is the FHA Loan good for?
- First-time home buyers
- Borrowers with credit challenges (Minimum score of 580, 640 score preferred)
- Borrowers with limited to no credit
ADVANTAGES
- Cash out refinance to 80%
- 3.5% down payment required can be all gift
- Non-qualifying refinance available
- Up Front Funding Fee included in loan amount and monthly mortgage insurance for life of loan if down payment is less than 5%
RESTRICTIONS
- Can only have one FHA loan
- Can only be used for a Primary Residence
- Up Front Funding Fee included in loan amount and monthly mortgage insurance for life of loan if down payment is less than 5%
A USDA loan (also known as a Rural Development loan) is a mortgage that is backed or directly guaranteed by the U.S. Department of Agriculture (USDA). Because they don’t require a down payment, USDA loans provide an affordable borrowing option for home buyers looking to purchase a property in a rural area.
How Do USDA Loans Work?
In many ways, USDA loans function similarly to conventional loans. For example, with both types of loans, borrowers will pay the same closing costs and adhere to the same repayment schedules.
There are, however, some unique advantages and disadvantages to USDA loans.
ADVANTAGES
- No Down Payment Required
- Attractive option for low- to moderate-income home buyers.
- Offers competitive interest rates. It pays to have a strong credit score and minimal recurring debts.
DISADVANTAGES
- You have to satisfy all of the eligibility requirements
- Upfront guarantee fees (a form of mortgage insurance)
- You may have difficulty finding a lender that offers USDA loans
USDA Eligibility and Requirements
- Must be U.S. citizens or legal permanent residents.
- Eligibility for a USDA loan depends on several factors, including geographic location, as well as your income, debt and credit score.
- Are designed to help develop affordable housing in rural areas.
- Can only be used to purchase a single-unit primary residence.
- You and all the adults in your household can’t make more than 115% of the median income in your area.
Cash-out refinancing gives you a new mortgage and lets you borrow more than what you owe, keeping the difference as cash. With rates at historic lows you maybe able to take cash-out of your property with little to no increase in your mortgage payment.
You can use the equity from your home (cash out) to payoff debt, remodel your home, send your kids to college or any other use that you may have.
What Is a Cash-Out Refinance Loan?
A cash-out refinance pays off your original mortgage and starts a new mortgage with new terms, including annual percentage rate, loan length and amount.
At closing, you’ll get the difference between the new mortgage balance and the value of your home.
Generally, you can cash out up to 80% of the value of your home, also known as LTV (Loan to Value). Keep in mind the higher your LTV the higher your rate will be. It is wise to only take out the amount of cash you need to reach your goal.
How Long Does a Cash-Out Refinance Usually Take?
Closing on a cash-out refinance generally takes at least 45 days but could stretch to 60 days or longer because record-low mortgage rates have created great demand. Every borrowers situation is unique and can effect how quickly you can close.
We recommend refinancing with a purpose. Let us show you how to responsibly use the equity in your home to improve your financial position and obtain your financial goals.
If you have a manufactured home, you may have trouble obtaining financing, but purchasing or refinancing a Manufactured Home does not have to be difficult. You need to be working with the right lender that has experience with this property type and understands the unique guidelines, inspections and forms that are required to finance a manufactured home.
Many lenders will not finance Singlewide Manufactured Homes or homes built before 1976. We do not have these restrictions. As a Mortgage Broker we have access to 100’s of lenders and are able to finance almost any manufactured home out there.
Many lenders will only finance Manufactured Homes using FHA financing. Inspired Life Mortgage does not have that restriction. We can use Conventional, FHA and VA financing.
Manufactured housing is a great affordable option and with a lender that knows how to finance Manufactured Homes, you could be a homeowner sooner than you thought.