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Loan Types

Maybe you are looking for a new home.  Maybe you need some remodeling or home additions. Whatever the case, we are prerepared to assist you in choosing the best loan that fits your financial and home-ownership needs. We will help you figure out which one is best for you. Here are some basic introductions into the seven types of loans:

Conventional Loans 97%

 

Conventional loans are mortgage loans from mortgage lending institutions not backed by an agency of the government such as the U.S. Department of Veterans Affairs or the Federal Housing Administration. Conventional loans can be either conforming or non-conforming.

VA Loans

 

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction. The VA does not originate loans, but sets the rules for who may qualify, issues minimum guidelines and requirements under which mortgages may be offered and financially guarantees loans that qualify under the program. The basic intention of the VA home loan program is to supply home financing to eligible veterans and to help veterans purchase properties with no down payment. The loan may be issued by qualified lenders.

3% Down Loans

 

This low down payment home loan allows for first-time buyers and existing home owners to obtain loans up to $453,100 with 3% down. The highest price home you could buy with three percent down would be about $430,000. To be considered a first-time buyer, you must not have owned a home in the past three years. You can use your own funds or gift funds from a family member for the down payment, and the home must be an owner-occupied single unit home (including condos). This means you can’t buy two- to four-unit properties, a second home, or investment properties with this loan. Conventional 97 mortgages are 30-year fixed loans, and do require mortgage insurance. Mortgage insurance is an extra fee on top of the monthly mortgage payment. If you put 3% down into a mortgage calculator, it will calculate the mortgage insurance for you automatically.

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. Jumbo mortgages are a good solution for borrowers who are looking to buy a higher-priced home.

FHA Loans

An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan which is provided by an FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, an upfront mortgage insurance premium(UFMIP) equal to 1.75 percent of the base loan amount at closing is required, and is normally financed into the total loan amount by the lender and paid to FHA on the borrower's behalf. There is also a monthly mortgage insurance premium (MIP) which varies based on the amortization term and loan-to-value ratio.

HELOC Loans

 

A home equity line of credit, also known as a HELOC, is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher-interest rate debt on other loans Footnote[1] such as credit cards. A HELOC often has a lower interest rate than some other common types of loans, and the interest may be tax deductible. 

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