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 $803,500 (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.
A USDA home loan is a government-backed mortgage designed for low- to moderate-income buyers in rural and suburban areas. It offers benefits like no down payment, lower interest rates, and lenient credit requirements. However, the home must be located in a USDA-eligible area, and the borrower's income must meet certain limits. Unlike conventional loans, which are available to a broader range of buyers and can be used for various property types, USDA loans are specifically for primary residences in rural locations.
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 $803,500 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.
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.
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.
Debt-service coverage 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.
Fix and Flip Loans allow investors (with experience) to secure financing for the acquisition and repairs. These12 month, interest only loans are the perfect option when looking to purchase a rental that needs some work, or rehab a property to sell for a profit.
