Learn About Mortgage
Main Loan TypesAll mortgage plans can be divided into categories in two different ways
- Firstly, conventional and government loans.
- Secondly, all the various mortgage programs may be classified as fixed rate loans, adjustable rate loans and their combinations.
Conventional and Government Loans
- FHA Loans
- The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit.
- Conforming Loans
- Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac.
- Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announce new loan limits every year.
- 203k is an Extension of the FHA Program. The ‘K’ adds the extra component that allows us to lend extra funds to complete repairs and make general improvements to the house. The Borrower still has to get pre-qualified for the loan. If you qualify for an FHA Loan, you qualify for a 203K.
- The 203K Program covers Everything except a New Construction. As long as there is an existing foundation there, 203K will cover the rebuilding.
- Helps to finance purchase of one- to four-Unit home used as residence
- Cash investment as little as 3.5% of the lesser of property value or purchase price