What Mortgage Program Is Right For You?
At Homesite Mortgage an educated borrower is our best customer! But knowing which mortgage programs you qualify for and which mortgage products are best for you can be confusing. To help sort through all of the options we provide an overview of the most commonly used loan programs, BUT the simplest way to get accurate answers to your mortgage questions is to speak with one of our licensed and experienced mortgage bankers who are standing by to take your call!
All mortgage programs can have a fixed interest rate or an adjustable rate (ARM). The mortgage bankers at Homesite Mortgage can provide you with a customized analysis of a fixed rate versus an ARM for your individual situation. They can also tell you about some unique programs that we offer that are designed to eliminate mortgage insurance in many cases.
These mortgages are designed for borrowers with good credit and at least 5% down payment (or 5% equity on a refinance). Conventional loans do not require mortgage insurance (PMI) if you have 20% or more down payment (or 20% equity on a refinance). Conventional loans are the most flexible at structuring. This allows savvy mortgage bankers to customize these loans to accommodate their borrower’s needs better.
These mortgages are government-insured loans that offer down payments of just 3.5% (or 3% equity on a refinance). FHA loans also have very good interest rates but unlike conventional loans, they do require the borrower to pay for mortgage insurance (MI) regardless of how much down payment you have. Some other nice features of FHA loans are you can get your down payment from a relative as a gift and the qualifying credit scores are lower that other programs and go as low as 580.
These mortgages are government-guaranteed and only available to veterans of the armed services, those currently on active duty or in the reserves, and widows or widowers of veterans. VA loans do not require any down payment at all. They also allow for lower credit scores that go as low as 580. However, VA loans to require a funding fee be collected and paid to the VA in exchange for their loan guarantee. The funding fee is almost always added to the loan amount so that the Veteran need not pay it at the closing.
These mortgages provide financing for low to moderate income buyers in suburban and rural areas. USDA loans do not require any down payment at all. They do require mortgage insurance (MI) in all cases regardless of down payment (or equity on a refinance). Although USDA loans do allow for lower credit scores they are more restrictive than VA and FHA and typically go as low as 640. A unique feature of USDA loans is that you can often times roll all or most of your closing cost into the mortgage.
These are mortgages that exceed the conventional loan amount limit of $453,100. Jumbo loans can go to loan amounts as high as $2.5 million. They do have loftier credit and down payment (equity on refinances) requirements but their interest rates are about the same as conventional loans.
These mortgages are designed specifically for borrowers who are 62 or older and have substantial equity in their homes. This type of mortgage can be used to increase the monthly income of retired or elderly borrowers. The home owner can receive monthly payments that are added to their loan balance or they can simply choose to take a lump sum distribution of equity. HECMs never require monthly payments and your income and credit score do not matter.