3 Different Types of House Mortgages You Should Know About

Even with the pandemic, the US real estate market is booming. However, many American citizens are struggling to invest in US properties because of the economic consequences of the pandemic. So, how do you invest in the real estate market?

An exceptional alternative is to opt for household mortgages that can help you acquire any house you like. That said, selecting the right mortgage program is never easy. From interest rates to the eligibility criteria, you’ll need to keep an eye on several things to determine if the mortgage program is worth it or not.

Keep reading this blog to learn about three different types of house mortgages that can help you purchase the property you need.

Conventional Loans

A conventional loan is any type of loan that is backed by the private sector rather than the government. This loan is an excellent financial option to help you buy a house in the US.

Conventional loans can be divided into two types; conforming and non-conforming loans. A conforming loan follows the rules set up by the Federal Housing Finance Agency (FHFA). From debit to credit factors, the FHFA has put in place a wide range of regulations that you need to be mindful of.

The most important rule for every conforming loan is the size of the loan because it helps you determine what level of property you can buy. Fortunately, for 2022, the FHFA has recognized the increasing real-estate prices and has increased the conforming loan limit to 647,200 dollars in many areas.

Non-conforming loans don’t have to follow FHFA standards. A non-conforming loan is used by individuals that have gone through a recent financial disaster and want to buy a property to get their lives back on track.

Quite often, conventional loan applications are rejected because applicants weren’t able to fulfill all of the requirements. Here are some of the requirements you’ll have to keep an eye on to ensure your loan mortgage is accepted:

• Credit Score: If you’re looking to get a conventional loan, the first thing you need to check is your credit score. The minimum requirement for a conventional loan is a credit score of 620. However, if you want to get the best loan deal with minimal interest rates, it’s better to have a credit score of more than 700.

Don’t worry if you don’t have a great credit score. You can hire mortgage brokers who know all the financial tips and tricks and can help you amplify your credit score in no time.

• Debt-to-income ratio: The debt-to-income ratio calculates the total debts you have to pay each month. Many mortgage lenders accept a DTI ratio of up to fifty percent for conventional loan applications.
• Down payment: Mortgage lenders accept three or five percent down payments for conventional loans.

Conventional loans are available at fixed and flexible interest rates. You should find mortgage lenders that offer both to have flexibility in your financial decisions.

Jumbo Loans

If you’re looking to buy a luxury home in a posh area, you’d need a hefty amount for it. If you don’t have the cash for the property, it’s better to get a jumbo loan.

A jumbo loan allows you to borrow more than the limits set by FHFA. It’s a top-notch alternative for individuals who don’t want to tie up a lot of cash on a hefty property purchase.

Since the lender is giving out a large amount in a jumbo loan, you’ll have to fulfill multiple requirements, including high income, high credit scores, and extra down payment. Finding the perfect jumbo loan deal within your budget can take a long time. We recommend you opt for experienced mortgage brokers that can help you out.

Government-backed Loans

The US government doesn’t lend money to citizens for a house mortgage, but it does help citizens through its FHA and VA loan programs. Here’s more information on the two government-backed loan programs.

VA Loans

If you’re an active or a former US army member, the government has introduced VA loan programs that can help you purchase the property you want. VA loans are backed by the US Department of Veteran Affairs. You don’t need a down payment or mortgage insurance for VA loans, and your loan application can be accepted with a low credit score.

VA loans are an excellent way for veterans who’ve served our country to acquire the houses they deserve. Many mortgage lenders understand this and offer minimal interest rates for US army veterans.

FHA Loans

If you don’t have a large down payment or a high credit score, an FHA loan is the perfect financial alternative for buying a house. As the name implies, these loans are backed by the Federal Housing Administration (FHA).

You’ll be surprised to know that many FHA loans are accepted with credit scores of 580. Before applying for an FHA loan, keep in mind that you’ll have to pay two premiums. One premium is paid upfront while the other is paid annually during the loan term.

If you want to make commercial lending easier, we recommend you get in touch with local private lenders like Atlantic Capital, Corp that can help you out with government-insured loans.

Licensed Mortgage Brokers Available to Help You Get Excellent Loan Deals!

Struggling to manage the finances to complete your real estate deal? You’ve come to the right place! At Atlantic Home Capital, Corp, we provide a wide range of mortgage loans Fort Lauderdale, including conventional loans, VA loans, FHA loans, modular home financing, and much more.

We understand that the lending process can be hectic for you. Our team of Fort Lauderdale Mortgage Refinance Company can streamline the loan procedure and help you find loan deals with minimal interest rates.

You can get in touch with our representatives here for more information.