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Mortgage 101 - Loan Categories
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Homebuyers are understandably concerned
about interest rates, but most
homebuyers underestimate the importance of choosing the right mortgage.
A loan that is customized to your needs can provide huge savings, while
choosing the wrong mortgage can be very expensive.
Let's begin with a quick
lesson on mortgages. You’ll find links for
additional information if you want to learn more.
There are three general
categories of mortgages:
- VA (Veteran’s Administration)
- FHA (Federal Housing Administration)
- Conventional
VA
loans are "guaranteed" by the Veteran's Administration for eligible
veterans. The most outstanding feature of a VA loan is the ability to
obtain 100% financing. A funding fee is paid to the VA at closing, and
the fee may be included in the loan. The loan is assumable to
subsequent buyers. The maximum VA loan amount is $417,000. If you think
you qualify for a VA loan, contact a Loan Officer for assistance. For
more information on VA loans, contact one of our Loan Officers.
FHA
loans are insured by the Federal Housing Administration. Borrowers
typically provide a small down payment, but with special associated
programs the down payment can be obtained as a gift from a home
advocacy non-profit association. A "Mortgage Insurance Premium" is paid
to the FHA at closing, and the fee may be included in the loan.
Additionally, there is a small monthly insurance premium added to the
payment. The maximum loan amount for an FHA varies with location. For
more information on FHA loans, contact one of our Loan Officers.
Conventional
Loans are very common and are
typically the most flexible. Loans
amounts not exceeding $417,000 for single family homes are called
"conforming" loans, while loans above $417,000 for single family homes
are called "jumbo" loans, and loans greater than $1,000,000 are
considered "super jumbo" loans. The down payment can be as little as 0%
(with specialized financing) to as much as desired. Mortgage insurance
may be required on some loans, but we have many products that do not
require mortgage insurance.
For more information on
mortgage insurance, click here. For more
information about conventional loans, contact one of our Loan Officers.
VA, FHA, and
Conventional loans offer various financing options (such
as fixed rate, adjustable rate, balloons, etc.) so you can customize
your loan to your needs.
My mortgage
team
and I remain up-to-date with the various
mortgage rates, options, loan choices and alternatives and is an
invaluable resource for any home buyer or home owner who is considering
refinance.
We are committed to providing you with mortgage services
that exceed your expectations.
Feel free to
browse my decision-making
tools and calculators.
When you are ready
to discuss mortgage options give us a call. (916)
899-4839
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