Conventional Conforming loans have maximum loan amounts that are set by the government and must follow a specific set of standards set by Fannie Mae & Freddie Mac. These types of loans are the most common for the average consumer.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. FHA home loans require lower minimum credit scores and down payments than many conventional loans, which makes them especially popular with first-time homebuyers.
A VA loan is a $0-down mortgage option issued by private lenders and partially backed, or guaranteed, by the Department of Veterans Affairs (VA). Eligible borrowers can use a VA loan to purchase a property as their primary residence or refinance an existing mortgage.
A jumbo loan is a type of financing where the loan amount is higher than the conforming loan limits set by the Federal Housing Finance Agency (FHFA). The 2022 loan limit on conforming loans for 1-unit properties is $647,200 in most areas and $970,800 in high-cost areas.
A home equity conversion mortgage (more commonly known as a reverse mortgage) is a type of loan that allows homeowners ages 62 and older, typically who have paid off most or all of their mortgage, to borrow part of their home’s equity as tax-free income. Unlike a regular mortgage in which the homeowner makes payments to the lender, with a reverse mortgage, the lender pays the homeowner.
A home equity line of credit is a revolving credit line that is secured by the home. Funds can be drawn from the borrower as needed and the rates are adjustable.A home equity loan is also secured by the home but instead of drawing funds as needed, the funds can only be taken as a lump sum and the rate is fixed.
A typical Non-QM Debt Service Coverage Ratio (DSCR) loan allows a borrower to qualify for a mortgage based on cash flow generated from an investment property – through a rental, for example – as opposed to their personal income. A calculation generates a debt-to-income ratio and the higher the ratio, the better.
Individual Tax Identification Number (ITIN) loans are for borrowers who do not have Social Security numbers. Homebuyers with ITIN cards can qualify for a mortgage as long as they meet the eligibility requirements.
A Foreign National mortgage loan is a loan done for a borrower that has one of the following visa: B-1, B-2,H-2,H-3, I, J-1, J-2, O-2, P-1, P-2 or resides in a Visa waiver country. Borrower must live and work in foreign country, cannot live or work in the US. The borrower qualifies under an ICF/DSCR program and qualifies just on how the property cash flows. The foreign national program includes non-owner occupied residences only. Purchase, refinance and cash out transactions.
No ratio mortgage, is a type of mortgage that does not require verification of income. The loan decision is based on credit rating and the loan-to-value of the property. If the income is difficult to prove, a no-ratio mortgage is a viable alternative to a conventional mortgage loan.
A bank statement mortgage is a special type of mortgage that allows the homeowner to qualify for a mortgage and borrow money based on only the assets in their bank account and not just their monthly or annual income. The type of mortgage is popular with small business owners or other borrowers who have a lot of assets but not a lot of cash flow. Specifically, anyone who does not receive W2 income or long-term and consistent 1099 income.
A loan option for eligible self-employed borrowers to purchase or refinance a home. This product allows personal or business bank statements to calculate income without requiring tax returns.
A 40-year mortgage is a home loan with a more extended payment term than a standard 15- or 30- year mortgage. The first 10 years are interest only.
An asset-based mortgage is a loan that uses an individual’s assets instead of income during the loan approval process. An asset-based loan (or asset depletion loan) is best when retired or living on a fixed income.
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