Conventional Loan Type
A long term loan that meets the guidelines put forth by FNMA and FHLMC. It is non-assumable and does not have pre-payment penalty.
Jumbo Mortgage Program
It is similar with Conventional Loan Type but the loan amount exceeds limit set by FNMA and FHLMC.
FHA Mortgage Program
A type of Government-Guaranteed Mortgage, is obtained through local lender, however Federal Government guarantees it through HUD.
VA Mortgage Program
A type of Government-Guaranteed Mortgage, is obtained through local lender, is similar to FHA Mortgage Program but the Veterans Administration is the guarantee part.
Conventional Loan Type
A conventional mortgage program is a loan that is long term (typically 30 or 15 years) and meets the guidelines put forth by FNMA (Federal National Mortgage Association) and FHLMC (Federal Home Loan Mortgage Corp.)
On a conventional loan the Mortgage Insurance (Ml) is required if the loan-to-value is more than 80%. It is typically to pay on a monthly basis for mortgage insurance.
A conventional mortgage is generally non-assumable and does not have a pre-payment penalty.
Adjustable Rate Conventional Mortgage
Adjustable Rate Mortgage (ARM) is another type of Conventional Mortgage. The main difference is that ARM has an interest rate and monthly payment that is subject to change.
The changes that are made periodically are based on an index that is determined at the time of obtaining the mortgage. The interest rate may grow up or fall and the monthly payments will adjust accordingly. There are several advantages to an ARM. Usually, the beginning interest rate of an ARM is lower than a fixed rate mortgage. With a smaller monthly payment, a borrower can sometimes qualify for a larger loan amount. Some adjustable rate mortgages can be assumable. The main disadvantage of an ARM is the possibility of a higher monthly payment. The details of an ARM can be complex; borrowers should consult their loan officer with any specific questions.
Jumbo Mortgage Loan Type
(or Non-Conforming) It consists of the same features as a conventional mortgage, but the loan amount exceeds the loan limit set by FNMA and FHLMC.
FHA Mortgage Loan Type (a type of Government-Guaranteed mortgage) A FHA mortgage is obtained through a local lender/broker, but the Federal Government guarantees these mortgages through the Department of Housing and Urban Development (HUD).
It allows for greater flexibility in income, credit, and down payment requirements. All FHA loans require Mortgage Insurance (Ml). An up front premium of 1.75% of the loan amount is required and is typically added to the loan amount. A FHA loan also requires a monthly Ml premium of 5%. In comparison, a conventional mortgage only requires a monthly MI premium if the loan-to-value is over 80%
VA Mortgage Loan Type
(a type of Government-Guaranteed mortgage) A VA mortgage can be obtained through a local lender/broker, and similar to a FHA mortgage, it is guaranteed by a government agency, the Veterans Administration. It is only eligible veterans that have served in the armed forces (as defined by VA). The specific point is the ability of an eligible veteran to finance up to 100% of the purchase price of a property. In order to lower the amount of cash the borrower needs to purchase a home, the veteran can also add the VA funding fee to the purchase price. The VA funding fee is a fee charged by the Veterans Administration to insure the payment of the mortgage. You can address to regional VA offices and they will answer any questions regarding a veteran's eligibility status.
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