Conventional loans aren’t backed by the government. Instead, private lenders back these loans. These loans are ideal for those with low debt-to-income ratios, good credit and higher down payments. Borrowers, therefore, do not have to pay for mortgage insurance on these loans.
An FHA Purchase loan is a loan that is backed by the government through the Federal Housing Administration. Due to the more lenient credit score and down payment requirements, FHA loans tend to be popular for first-time homebuyers. Those who utilize FHA loans, however, should expect to pay mortgage insurance, which is typically required when the borrower has a low down payment.
An FHA Streamline is when you refinance an existing FHA loan. It is a “streamline” because the appraisal and income requirements are more lenient than other refinance processes. Generally speaking, an FHA Streamline can allow a borrower to decrease their interest rate or move to a fixed-rate.
High Balance Loans
These are loans that are generally considered conventional, but the amount of the loan is higher than the conforming loan limit.
Jumbo Loans allow for situations where the amount is above the confirming loan limit set by the Federal Housing Finance Agency. Higher credit scores are generally a main requirement for these loans.
Refinancing may be an option for those who are interested in restructuring their mortgage terms as a way to bring down their monthly costs. A refinance can be used to lower your payment, consolidate debt, pull out equity in your home, or lock in a fixed-rate to avoid future payment increases.
A Reverse Mortgage* is available to those who are 62 years old or above. These loans serve as a way to retain liquidity in retirement years and the borrower has no payments as long as they remain in the house.
A VA loan is backed by the Department of Veteran Affairs and offers lenient credit score requirements, no down payment and more benefits to active-duty military members, spouses and Veterans.
VA Streamline Refinance
Sometimes rereferred to as a VA IRRRL, this option has a simplified approval process such as no requirement for an appraisal and a non-typical underwriting process. This allows for less fees and paperwork, which results in an expedited process.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.