LOAN OPTIONS

FHA

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Loan terms: 15, & 30 year loans

Loan types: Purchase, Refinance

Interest Rate Types: Fixed, Adjustable

Property Type: Primary Residence

This is a HUD or government insured loan that allows buyers to purchase a home for only 3.5% down. The FHA loan has maximum loan limits for each county which are significantly lower than conventional limits (search your county limits here). An FHA loan is excellent for someone who has less money to put down, and someone who has higher debt-to-income ratios, or someone whose credit is less than perfect.

  • Only 3.5% down

  • Flexible qualification guidelines

  • Debt-to-income ratio as high as 55%

  • Requires up-front & monthly mortgage insurance (MI)

  • Maximum loan limits vary by county

  • MI required for the entire life of the loan

  • Allows for no cost, no qualifying “streamline” refinance

CONVENTIONAL

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Loan terms: 10, 15, 20, & 30 year loans

Loan types: Fixed, Adjustable

Interest Rate Types: Purchase, Refinance

Property Type: Primary Residence, Second Home, & Investment Properties

The conventional conforming loan is the traditional mortgage program. It is called “conforming” because it fits within the standardized guidelines set by Fannie Mae and Freddie Mac. It can be used to finance all different types of residential properties. The loan requires mortgage insurance if the down payment is less than 20 percent. The monthly mortgage insurance required for this loan is cheaper than FHA mortgage insurance. A conventional loan caters to those who have more money to put down & great credit scores.

  • As low as 3% down on a primary residence purchase

  • Debt-to-income ratio as high as 45%

  • Qualifying guidelines more strict than FHA

  • Requires monthly mortgage insurance (MI) if down payment is less than 20%

  • MI can be cancelled at 80% loan-to-value

  • Loan amount up to $453,100 (anything higher is a jumbo loan)