One of the first steps in the home buying process is getting a home loan and for that you really should use a reputable, full time, knowledgeable and secure mortgage company.  Part of the mortgage crisis of the mid 2000’s was part time lenders and quickie mortgage brokers passing out pre-approval letters to anyone and everyone.   When you start your search make sure you have a good, trustworthy pre-approval letter in your hand.   This will not only place you in a better bargaining position but also allow you to know actual home payment and costs associated with buying up-front.

There are many different types of loans such as FHA, VA, DVA, Conventional, Hard Money and Rural Development loans that each offers their own advantages.   Each one of these loans may have a different amount required down so ask our real estate professionals for help, that’s why we are here.

Types of Home Mortgages

We’ve all heard the terms, FHA, DVA, VA, Rural Development, Reverse Mortgage, Home Equity Lines and Conventional. When did it get so complicated? Well, really it’s not as daunting as it looks. Each home mortgage type out there has its own benefits and unique features to fit your home loan needs.  Let’s take a look at the different type of home mortgages:

Conventional
Traditional loan programs that usually require 5% down and offer competitive interest rates. Documentation and fair-to-good credit are necessary.

Flex 97%
Similar to the FHA outlined below but without maximum mortgage amount limitations. Must be a single family, owner occupied home and borrower must have a credit score of over 680.

FHA Mortgage
Backed by the Department of Housing and Urban Development, this mortgage offers the borrower the ability to put as little as 3.5% down payment — and they can even finance “allowable” closing costs. Seller can contribute up to 6% of the purchase price to the buyer towards closing costs.

Investor Loans
Used to finance 1-4 family properties that will be for investment with as little as a 20% down payment. Aggressively priced, these programs have many variations. Some programs may not be available in certain states.

Second Mortgage Loans
Subordinate to the first mortgage. Second loans offer the borrower the ability to get money for home improvement, debt consolidation, or many other reasons without disturbing their first mortgage. This is convenient when you have a low interest first mortgage.

Jumbo Loans
Offers 30 and 15 year fixed rate mortgages and competitive ARM products with full documentation.  Cash out and No cash out refinances are allowable. Single family detached, Condo’s, PUD’s and single-family second homes can be financed with no prepayment penalty.

VA Mortgages
Backed by the Veterans Administration and the federal government, it is similar to FHA except that you have to be a qualified Veteran or military person.

Reverse Mortgage
A reverse mortgage is a form of equity release. It’s a loan for those 62 years of age or older to access a portion of the equity in their home. In a “regular” mortgage, you make monthly payments to the lender. In a “reverse” mortgage, you receive money from the lender. Generally these don’t have to paid back as long as you live in your home. The loan is repaid in cases of death, selling of your home, or when your home is no longer your primary residence. The proceeds of a reverse mortgage generally are tax-free, and many reverse mortgages have no income restrictions.

If you have any other questions about what home loan type may be best for you, feel free to call our office at 612-282-SOLD, we’re here to help.

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