A conventional mortgage has certain guidelines that it must meet. These guidelines are set by Fannie Mae and Freddie mac. If the mortgage does not meet those guidelines, it cannot be backed by them. These guidelines include

• Loan limit of $453,000
• Private Mortgage Insurance (PMI) is required if you put down less than 20%
• Minimum down payment of 5% for a Conventional Loan on a Primary or Second Home.

A conventional home loan has a lower debt to income ratio allowed than FHA. The total debt ratio limit is up to 50% with up to 20% down payment. (FHA can go up to 55% and sometimes higher).

FHA mortgages are home loans that are insured by the Federal Government. This insurance protects the lender from losses suffered if the home goes into foreclosure. It is not the same as hazard insurance or insurances that pay in the event the borrower dies or becomes disabled.

FHA allows a buyer to purchase a home with as little as 3.5% down. They tend to be more lenient on areas such as credit, funds to close and co-borrowers.

FHA allows the borrower to get the funds necessary to close from several sources. They include such areas as personal savings, gifts, grants, loans from retirement accounts and seller contributions.

The VA mortgage loans are one of the best and safest methods to use when buying a home. Now even active duty personnel can qualify. If you are a Disabled Veteran, you may qualify for additional benefits on a VA home mortgage loan. The VA Home Mortgage Program does not limit the number of times a veteran may use the program.

You do not have to put any money down to qualify for a VA Home Mortgage Loan for up to $417,000. If the seller agrees to pay the closing costs, you may be able to purchase the home with no out of pocket cost. The loan and sales contract can be set up so that the VA Home Mortgage Loan cover 100% of the selling price and the seller covers the closing cost.

The USDA loan program is designed only for Primary Residence mortgages,  and the program funds 100% of the purchase price of the property.

In order to finance the full 100%, there is a 2% funding fee that is financed into your home loan.  This loan will allow the borrower to finance up to 102% of the appraised value. 

There is a very Low Monthly Mortgage Insurance payment included in your payment. 

Non Conventional Mortgages for those who’s income, credit or property doesn’t fall within the guidelines of the Consumer Financial Protection Bureau.

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