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What types of loans are available?
When you're buying a new home or refinancing an existing
one, finding the right mortgage to fit your needs can be
a tedious and difficult venture. Working with a
reputable broker who can advise you of the different
programs available is the most important step.
Here we will discuss some of the different types of
loans that are available.
All Loan Programs offer both
fixed rate and adjustable rates.
Conventional Loans - Means
that it conforms to Fannie Mae and Freddie Mac
guidelines. Typically you have to have credit
scores above a 620 and have max income/debt ratios of
28/36. What are Income/Debt Ratios (click
here).
FHA Loans - FHA stands for
Federal Housing Authority. These loans allow for a
3-5% minimum down payment and finance a portion of the
closing costs, making home ownership more
affordable. FHA allows for more blemished credit
borrowers to get the financing that you desire.
The max income/debt ratios are 29/41. What are
Income/Debt Ratios (click here).
VA Loans - VA Loans were
created in an effort to help veterans of the armed
forces purchase property and offer 100% financing to
qualified applicants. The Lender/Broker will ask
for you certificate of eligibility or DD214. VA
loans have no income ratio requirements and only have a
debt ratio requirement of 41%.
Sub-Prime Mortgages -
Sub-Prime loans allow borrowers with less than perfect
credit, alternative income documentation, recent
bankruptcies to purchase a new home or refinance an
existing one. Subprime loans have a max debt ratio
requirement of 55%.
No-Doc Loans - These loan
programs are for borrowers who have credit scores
greater than 680, but have no way to prove their income
or would rather not disclose their income.
NINA Loans - NINA stands for
No-Income, No Asset. This loan program is exactly
as it sounds. The application the borrower
completes will have no reference to the applicant(s)
employment, no income listed, no assets. It will
show the borrowers bills, their name, address, social
security numbers, property address, date of birth and
years at residence. That's it.
There are numerous loan programs available, too many
to list, remember not every lender/broker is familiar
with or offers the same loan program so you want to work
with a reputable lender/broker who is attuned to your
situation.
Next:
Things to Consider When Choosing a Loan Program
Back:
To
Mortgage Loan Process
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