Types of Mortgage Loans
Types of Mortgage Loans:
FHA Loans: The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit. FHA loan requires FHA appraisal
VA Loans: VA loans are guaranteed by U.S. Dept. of Veterans Affairs. The guaranty allows veterans and service persons to obtain home loans with favorable loan terms, usually without a down payment. In addition, it is easier to qualify for a VA loan than a conventional loan. Lenders generally limit the maximum VA loan to $203,000. The U.S. Department of Veterans Affairs does not make loans, it guarantees loans made by lenders. VA determines your eligibility and, if you are qualified, VA will issue you a certificate of eligibility to be used in applying for a VA loan. VA loan requires a VA approved appraiser to appraise according to their guidelines
Jumbo Loans: Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as 'jumbo' loans. Because jumbo loans are bought and sold on a much smaller scale, they often have a little higher interest rate than conforming (conventional loan), but the spread between the two varies with the economy.
USDA Loans: USDA Guaranteed Loan is Government insured 100% purchase loan. These Loans are only offered in rural area's and serviced by direct lenders that meet federal guideline's.100% loan with no mortgage insurance. The customer must qualify according to the local USDA income limits and the house must be in a USDA approved location and can not be in a flood zone. USDA loan requires an FHA appraisal to be done so you can't have peeling chipping paint and no safety or health hazards.
Conventional Loans: Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit for Americans.
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announces new loan limits every year.
The 2008 conforming loan limits for first mortgages remain at the limits set in 2006 and 2007:
|
One-family/Unit: |
$417,000 |
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Two-family/Unit: |
$533,850 |
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Three-family/Unit: |
$645,300 |
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Four-family/Unit: |
$801,950 |
