Cutting Through the Confusion
Getting lost in all the mortgage lingo? You are not alone. According to a study performed by the Mortgage Bankers Association of America, “many borrowers say they get too much information when they go through the home-lending process…” Working with an experienced mortgage lender will save you a world of frustration by cutting through all the confusion. Your Lender will present the relevant information to get you on your way to moving day!
Which Program is Right for Me?
When purchasing a new home, a little research can go a long way. Asking the right questions will help us identify the right program that meets your needs.
- Are you a first-time homebuyer?
- Are you active or retired military?
- Where is your future home located?
- Which government programs do you qualify for?\
Common Loan Programs
You may have heard of these common loan programs: Conventional, VA, FHA, USDA, ARM (Adjustable Rate Mortgage), Jumbo…but what do they mean?
The conventional mortgage is the most commonly used loan program for borrowers with good credit and steady income and can be used for purchasing a primary residence, second home or rental property. Conventional loans do require a down payment that can be as low as 3% of the purchase price of the home. PMI, or private mortgage insurance, is required when the down payment on the home is less than 20%. After 20% equity has been built up, the loan becomes eligible to have PMI removed.
As a thank you in advance for those who are currently active duty, retired military or eligible reservists, this loan program offers veterans 0% down payment! The VA loan is guaranteed by the Veterans Administration and is government insured. Rather than having a monthly mortgage insurance fee, this loan program has a VA funding fee that is calculated into the initial loan amount. For borrowers who are considered disabled, the VA funding fee is waived entirely.
From all of us here at Alpha Mortgage Corporation, thank you for your service!
Insured by the Federal Housing Administration, the FHA loan requires a down payment as low as 3.5% and comes with a maximum loan amount that is determined by the location of the property. The FHA loan is helpful to borrowers who may have a higher debt to income ratio and allows for less than perfect credit. The FHA loan program does require PMI, or private mortgage insurance.
The USDA loan is insured by the US Department of Agriculture and is offered if your potential property is located in a USDA acceptable rural area. One of the benefits of the USDA loan is that it offers 0% down payment. Check here for USDA eligibility and income limitations: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do;jsessionid=12MOUsHhXtG476sIGOnK5FRY#
The Jumbo loan is meant for loan amounts exceeding $453,100. In order to qualify for the Jumbo loan, borrowers must have a higher credit score.
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