Purchasing a home is one of the most exciting events in life. However, qualifying can be an unclear and intimidating experience. Why this anomaly between two symbiotic events? We help you understand and determine the ideal financing program. Below are some popular loan types, but there are several other options available either seasonally, promotionally, or based on unique qualifiers.
Conventional (Conforming/Traditional) Loans
These are the most standard form of loans that the government encourages and sponsors. These loans have guidelines and limits to which they must “conform”. One such guideline is the loan limit amount. The Federal Housing Finance Agency sets the national conforming loan limit, which is $424,100 for 2017 in most markets. In order to qualify for a conforming loan, you will need to purchase a house that puts you under the conforming loan limit in your area.
A non-conforming or “Jumbo” loan is one that does not fall within the guidelines as set by the Federal Housing Finance Agency. Therefore, these loans are subject to a different set of qualifying criteria by lenders, who in some cases could be private investors. Jumbo loans can have some flexibility that conforming loans don’t have. Optional examples are: higher debt-to-income ratio, lower down payments, no additional mortgage insurance, etc. The interest rate, although adjustable, may also be lower in many cases. Your LaChica loan agent is best qualified to guide you based on your situation and the current market conditions.
FHA loans are an alternative available when a conventional loan is not practical or affordable. One major advantage is that the down payment required for these loans can be lower than in the case of conventional loans. Additionally, the rates are competitive and closing costs are lower. The Federal Housing Administration (FHA) provides mortgage insurance on loans issued by approved lenders, backing them financially and making these loans possible and easier to qualify.
For qualifying customers, VA loans are the most affordable loans that are available on the market. Zero down payment, negotiable interest rates, lower closing costs and no additional mortgage insurance costs, make these loans highly desirable and sought after. There are many other advantages that will be explained by your LaChica Loans agent.
Private or “hard-money” lending is available for home purchases and mortgage refinances. Individual investors or groups of investors either “buy” your loan or finance a fund that “buys” your loan. This is a great tool available to your LaChica agent to assist you by getting a creative loan when the situation so demands.