March 03, 2021 at 11:12am | Michael Hunter
There are a few types of mortgages, you may qualify for some. Here's more information about them!
  1. Conventional Mortgage
    • A home loan that isn't not insured by the federal government.
    • Conforming: loan amount that falls within maximum limits set by Federal Housing Financial Agency.
    • Non-Conforming: doesn't meet guidelines. Most common is a jumbo loan.
    • Can be used for primary, secondary, or investment property.
    • Overall borrowing cost lower than others.
    • Can pay as little as 3% down on loans.
    • Minimum FICO score has to be 620.
    • Debt-to-income ratio has to be 45%:50%.
  2. Jumbo Mortgage
    • Conventional types of mortgages that have non-conforming loan limits- home price exceeds federal loan limit.
    • More common in higher-cost areas and usually require more in-depth documentation.
    • Borrow more money to purchase home in a high-cost area.
    • Competitive interest rates.
    • FICO scored typically needs to be 700, though some may accept 660.
  3. Government-Insured Mortgage
    • Though the U.S. Government aren't mortgage lenders, they do play a role in helping American's become homeowners.
    • 3 Gov't agencies that back mortgages:
      • FHA- For those who haven't saved up a large down payment, those that don't have the best credit, minimum 580 FICO. 2 mortgage insurance premiums required.
      • USDA Loan- Moderate to low income borrowers in rural areas. USDA- eligible areas only. Some don't require a down payment.
      • VA Loan- Flexible, low interest mortgage for U.S. military families. Funding fee as a percentage of loan amount is required.
    • Helps finance home when you don't qualify for conventional loan.
    • Credit requirements are more relaxed.
    • No large down payment is needed.
    • Open to repeat and first-time buyers.
    • Many have mandatory mortgage insurance premiums that can't be cancelled.
    • High overall borrowing costs.
  4. Fixed-Rate Mortgage
    • Same interest rate for the life of the loan.
    • Monthly principal and interest payment always the same.
    • Generally pay more interest with longer-term loan.
    • Takes longer to build equity.
    • Rates are typically higher.
  5. Adjustable-Rate Mortgage
    • Fluctuating rates that can increase and decrease depending on the market conditions.
    • Many have a fixed rate for a few years before the loan changes to a variable interest rate for the remainder of the loan.
    • Save substantial amount of money on interest payment.
    • Monthly payments could become unaffordable leading to a loan default.
    • Home values may fall in a few years making it harder to refinance or sell home. 
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