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LOAN PROGRAMS and options

The Perfect Loan For Your Perfect Home

We can help you understand the different loan programs and choose the right option for you.

LOAN PROGRAMS

CONVENTIONAL

A conventional loan is any type of loan that is not secured or guaranteed by a government agency.

+ Usually faster to process than Federal Housing Administration (FHA) or Veterans Affairs (VA) loans

+ Down payment amounts as low as 3%

+ Monthly mortgage insurance is typically lower than government programs

+ Mortgage insurance is not required with 20% down

FHA

The most common of the government-backed loans. They typically have more flexible lending requirements, making them easier to qualify for than conventional loans.

+ Down payment as low as 3.5%.

+ Allows higher debt to income ratios

Keep in mind that the FHA does not lend money. Rather, it insures mortgages. This means that even though minimum down payments are relatively low, you are required to pay mortgage insurance. There are two premiums. One up front and the other paid monthly.

USDA

Competitively priced mortgage option that helps to make purchasing a home more affordable for individuals in designated rural areas.

+ Little to no down payment from qualified borrowers that are buying a primary residence

+ The ability to qualify up to 100% of the purchase price

Keep in mind that USDA does not lend money. Rather, it insures mortgages. This means that even though there is potentially no down payment required, you will need to pay a guarantee fee. There are two fees. One up front and the other paid monthly.

VA

Reserved for most active-duty military personnel as well as veterans and select members of their families. Veterans don’t have to be first-time buyers, and this benefit may be used again in the future.

+ Little to no down payment from qualified borrowers that are buying a primary residence

+ The ability to qualify for up to 100% of the purchase price

+ No private mortgage insurance premiums to be paid

Remember that the VA does not lend money. It guarantees private lender loans. It also imposes a funding fee of between 1.4% to 3.6% of the loan amount. This can be paid upfront or financed into the loan.

REVERSE MORTGAGE

Allows homeowners to borrow money using their home as security for the loan.

+ The loan is repaid when the borrower no longer lives in the home.

+ Interest and fees are added to the loan balance each month and the balance grows

+ One borrower must be 62 or older

+ Borrowers don’t have to make a monthly mortgage payment.

NON-QM LOANS

Mortgages that don’t meet the Consumer Financial Protections Bureau’s requirements to be considered qualified mortgages.

A qualified mortgage meets the CFPB’s “ability to repay” rule, which requires that lenders vet your finances and set terms on the loan that you’re likely to be able to pay back.

While standard QM loans require you to verify your income with tax returns, W2s and paystubs, a non-QM lender might be able to use your bank statements to calculate incomes to qualify for your loan.

Options for borrowers:

+ Who are self employed

+ With high net worth

+ Investing in multiple rental units

+ With recent credit issues

LOAN OPTIONS

FIXED RATE

Most popular mortgage loan option with a specific interest rate for the entire term of the loan.

Essentially, the interest rate on the mortgage will not change over the lifetime of the loan, and the borrower’s interest and principal payments will remain the same each month.

With this type of mortgage, even fluctuations in the market will not have an impact on the rate.

ADJUSTABLE RATE MORTGAGE

The best option if your goal is to get the lowest possible rate STARTING out.

An adjustable-rate mortgage is also called an ARM.

Is a home loan with an interest rate that adjusts over time based on the market.

ARMs typically start with a lower interest rate than fixed-rate mortgages. This interest rate won’t last forever. After the initial period, your monthly payment can fluctuate periodically, making it difficult to factor into your budget.

JUMBO

Jumbo loans exceed the maximum conventional loan limits established by Fannie Mae and Freddie Mac.

Jumbo loans exceed the maximum conventional loan limits established by Fannie Mae and Freddie Mac.

The limit on conforming loans in 2023 is $726,200 in most areas of the United States. Jumbo mortgages offer much higher purchase limits.

Compared to conventional loans, jumbo loans typically come with higher interest rates and down payment requirements. The minimum down is as low as 10.1%.

Jumbo loans are more attractive to those borrowers that have:
– A lower debt-to-income ratio
– A healthy credit score of 700 or higher
– The ability to make a larger down payment.

HIGH BALANCE

Given to homebuyers in high income areas. It exceeds national conventional loan limits, but meets local limits.

These loans are backed up by Fannie Mae and Freddie Mac.

Loan limits vary by county and are set by FHFA.

Down payment as low as 5% and minimum credit score of 620.

Maximum debt-to-income is 45%.

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our team

Ready to guide you through The loan process

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Keri Imhof

owner/Loan Officer

Works with the client every step of the way to get them the best loan for their individual situation.

Kirstie Conradson

Loan Officer Assistant

Works with the borrower to collect documents and information needed to assist Keri with processing the loan.

Cheryl Boyer

Assistant

Handles customer relations once the loan has been closed.