A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government and conforms to the loan limits set forth by Freddie Mac and Fannie Mae. Conventional loans may be "conforming" and "non-conforming."  Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac.

Conventional Loan Guidelines

Presently, these guidelines put the maximum price for a first mortgage at $647,200 for a single-family dwelling. If the purchase is for a property that is either a two-family, three-family, or four-family dwelling, larger values apply before the loan is no longer considered a conventional loan. Some Requirements of Conventional Loans are:

• 5-20% down, gift funds accepted 
• Fixed or adjustable rate 
• Full documentation of income and assets to close 
• Additional underwriting requirements will vary by borrower situation 
• No mortgage insurance: mortgage insurance is not required for loans when you put down 20% or more toward the down payment 
• May be used for primary residence, second homes and investment property 

To learn more about Conventional loans and how to apply, give us a call today at (610) 351-0428!

Federal Housing Administration (FHA) loans are mortgage plans that provide an alternative to conventional banking finance.

FHA loans can be especially attractive to first-time homebuyers because of their lower down payment requirements and more lenient qualifying guidelines compared to other loan options.

FHA loans offer more flexibility, especially when it comes to credit score, income level, homeowners’ equity, and down payments. This makes them one of the most preferred alternatives to fixed-rate and adjustable rate mortgages. Some Requirements of FHA Loans: 

• 3.5% down, gift funds accepted 
• Terms of 30-year, 25-year, 20-year or 15-year fixed rates 
• Adjustable rates available as well 
• Full documentation of income and assets to close 
• Additional underwriting requirements will vary by borrower situation
  

A jumbo loan is any home loan that exceeds a specific threshold called the conforming loan limit. Currently, the conforming loan limit for a single-family home is $647,200.

Qualifying for a jumbo loan typically requires higher credit scores, lower debt-to- income ratios, higher reserves and larger down payments than qualifying for a standard conforming home loan. Offered With Jumbo Loans: 

• Loan amounts up to $2.5 million 
• Low down payments beginning at 5% 
• Fixed and adjustable rates 
• Loans for primary, secondary and investment properties 
• Additional underwriting requirements will vary by borrower situation
  

USDA loan program, also known as Rural Housing loan, is a type of government-insured home loan that allows the borrower to purchase a new home with no down payment. USDA loans are generally fixed rate loans.

Requirements and Benefits of a Rural Housing Loan: 

• O% down payment 
• Property must be in a qualifying area Income limits may apply based on household size 
• Additional underwriting requirements will vary by borrower situation 
• Benefits USDA loans do not require a down payment 
• Homebuyers may finance a home for 100% of the purchase price
  

• Are you an active-duty military member, a veteran, or a veteran’s surviving spouse?
• Do you want your loan application processed quickly, without any red tape?
• Are you interested in buying a home with no down payment?
• Do you want to refinance up to 100% of your home value?

If you have answered “yes” to any of the above questions, then a Veterans Affairs (VA) loan is the best option for you. Such loans can be secured, even with an unimpressive credit score and rating. Unlike other market loans, a VA loan is available as both a fixed rate and ARM mortgage and does not include any monthly insurance (PMI).

Requirements

• 0% down
• Valid Certificate of Eligibility
• Additional underwriting requirements will vary by borrower situation

Benefits

• The VA home mortgage does not require a down payment
• The VA loan program provides qualified veterans with a more competitive interest rate, resulting in a lower mortgage payment
• The VA loan program provides opportunities for qualified veterans who would not otherwise qualify for homeownership through conventional financing

With a reverse mortgage, the borrower receives payments from the lender and does not need to make payments back to the lender so long as he or she lives in the home and continues to fulfill his or her basic responsibilities, such as payment of taxes and insurance. 

The loan balance grows over time as the borrower receives payments and interest accrues on the loan; home equity declines over time. Essentially, the mortgage works in the reverse direction of a forward mortgage, which is where the term “reverse” comes from. The reverse mortgage must be paid when the last surviving borrower sells the home, moves out permanently, or passes away. Eligibility Requirements for HECM Purchase Loans

Eligibility Requirements for HECM Purchase Loans

• The youngest titleholder must be 62 years or older
• The purchased home will be occupied within 60 days of closing
• The purchased home must be your primary residence
• You must meet financial eligibility criteria as established by HUD
• You may need to set aside additional funds from the loan proceeds to pay for taxes and insurance
• The difference between the purchase price of the home and the HECM proceeds will be paid in cash from the sale of an existing home or another source of eligible funds
• Single family homes

Certain Restrictions

• Gift funds may be an acceptable form of down payment, however certain restrictions may apply
• If the homeowner is using cash, the cash must be seasoned for 60 days
• There must be proof that the homeowner has “eligible funds” from qualifying sources for the closing; depending on the source of funds, specific documentation may be required
• Additional underwriting requirements will vary by borrower situation