A conventional loan is a mortgage loan that's not backed by a government agency. While some government-backed loans provide unique benefits to homebuyers, conventional loans remain far and away the most common type of mortgage. Typically conventional/conforming loans are capped at $766,550 (aside from high cost areas which can be higher). Conventional loans require a 620+ credit score and can have downpayment options as low as 3-5%.
An FHA Loan is a government-backed mortgage insured by the Federal Housing Administration. FHA home loans allow for lower minimum credit scores and down payments than many conventional loans. FHA loans can allow for credit scores as low as 580 and in often cases a downpayment as low as 3.5%.
A VA loan is a mortgage option issued by private lenders and partially backed, or guaranteed, by the Department of Veterans Affairs (VA). Eligible borrowers can use a VA loan to purchase a property as their primary residence or refinance an existing mortgage.
Rural development loans are a great option for borrowers looking for 100% financing. USDA loans require the property to be located in a rural development area.
A 203k loan enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. Typically these loans require a HUD approved contractor to complete the renovation, and the draw process can be a little different than the conventional homestyle renovation loan. These loans typically allow for a ~600 credit score.
A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $766,550 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limits require a jumbo loan. Jumbo loans are considered riskier for lenders because these loans can’t be guaranteed by Fannie Mae and Freddie Mac, meaning the lender is not protected from losses if a borrower defaults.
Bank statement loans are typically designed for self-employed individuals who have a lot of tax deductions and have a hard time qualifying for a mortgage because of it. These loans qualify the borrower's income based on a 12 or 24 month average of the gross deposits for the borrower's business bank account. However, since these loans are riskier for the creditor issuing the funds, they typically come with a higher interest rate.
Like bank statement loans, 1099 loans are reserved for borrowers who are independent contractors or self employed. We look at a two year average of the borrower's 1099 income and use it as their qualifying income. These loans too can tend to be riskier so borrowers should expect a highr rate if you’re comparing to a conventional or FHA loan.
Tap your properties equity without refinancing. This is a great option if your current mortgage is a low competitive rate. You can keep your first mortgage and use this for paying off high interest debt, making home improvements, etc.
A reverse mortgage is a specially designed loan for homeowners aged 62 and above. Reverse mortgages work by allowing homeowners to convert a portion of their home’s equity into cash without having to sell the home or make regular monthly mortgage payments (keeping up with property taxes, insurance, and maintenance is required). Unlike a traditional forward mortgage, where the borrower must begin repaying the loan right away, homeowners do not have to repay funds received through a HECM until after the final borrower no longer lives in the home. There are no monthly mortgage payments required.
If you are buying an investment property through your personal name rather than a company, you can use a conventional option. Unlike most investment loans, this is a ‘full doc’ loan, meaning we gather all the normal mortgage information and qualify you based off of debt to income ratios. While qualifying might be more difficult, terms of the loan are much better.
This loan is perfect for investors looking to add value to property.
Debt-service ratio loans. These loans require no personal income financials but rather qualify the deal based on the properties ability to generate either long-term or short-term rents. The lender will do an appraisal on the property that includes a market rent analysis which will determine the amount of prospective income the property can generate. Depending on that figure the lender will ensure that the rent will cover the mortgage payment and depending on the total cash-flow, the lender will issue terms appropriate to the income of the property.
Mixed use loans are designed for properties that have both a commercial and residential space. In doing so, they can be more complicated for most lenders to fund. However, a mixed use loan is typically qualified by using the DSCR for both residential and commercial tenants. The process to determine the income of the property is lengthier than the process for a regular DSCR loan.
Option to buy an investment property even when you are not a US citizen. Qualified based off of the DSCR method.
Looking to bridge the gap until you secure additional or long-term financing? We can help you achieve the next step towards your goals with industry-low rates on a bridge loan.
A commercial business loan can help you start or grow a business, or purchase or renovate a commercial property.
Similar to fix-and-flip loans, ground- up construction loans allow you to take the acquisition price + renovation in order to build a property from the ground-up.
