CONVENTIAL LOANS

 

If you are looking for a mortgage with a wide selection of terms and competitive rates, conventional loans may be your answer. These loans are what most people think of when it comes to a traditional home loan. Conventional Home Loans are not part of a government-sponsored program, and are instead fully funded and insured by private lenders and insurers.

 

BASIC CONVENTIONAL LOAN REQUIREMENTS

 

Ultimately, lenders individually decide who is and is not approved for a conventional loan. Borrowers should be prepared to supply at least two years of W-2’s, tax statements, bank statements and proof of cash reserves and submit to a credit report.

Clients should have good or better credit – at least a 660 or higher, and a low debt to income ratio.

For most conventional loans, a 20% down payment is required in order to not pay mortgage insurance, but there are many options with as little as 3% down.

 

FHA LOANS

 

FHA loans are an awesome option when it comes to home financing. They have great benefits, such as a minimum of only 3.5% down payment. These non-conventional loans are secured by the Federal Housing Administration and are funded by private lenders.

 

BASIC FHA LOAN REQUIREMENTS

 

FHA loans are a much more accessible financing option with lessened requirements and added benefits such as:

  • 550+ Credit Score
  • 3.5% Down Payment(Compared to 20% conventional)
  • Fixed interest rates
  • The ability to have some or all closing costs covered by the seller or the lender.

If you would like to make repairs to your existing home, FHA also offers 203(k) mortgages for home repair.

Investment loans

These types of loans are typically used by investors to purchase short or long term rental properties or distressed properties for resale.

 

Basic Investor loan requirements

There are many types of investor or business purpose loans. Some of the highlights of these loans are

  • Loans based off of debt service ratio instead of personal income
  • Stated income loans
  • Flexible debt to income guidelines
  • Prove cash flow instead of income
  • Use bank statements for proof of income
  • Some loan types may not require property inspections or appraisals