I was talking to some of my Referral Partners and they said it would be helpful to have an overview of the Mortgage Loan programs available in today’s market. So, here we go:
- Conventional (Fannie Mae,Freddie Mac), Loan amounts to $417,000, Credit scores: Generally higher 680 plus, Normally 5% down with PMI, but 3% down is available(FHA is a better alternative with less than 5% down). PMI can be taken off after the Loan to Value of the Home Reaches 80% of purchase price or in some cases current market value.
- FHA – Loan amounts in the Atlanta Area to $342,700, outside Atlanta to $271,050, Credit Scores as low as 585(This score is almost like a Unicorn, most FHA’s need to be 620 plus to get approved. 600-620 will fly many times), As low as a 3.5% Down Payment. Has Up Front PMI along with Monthly PMI. In most cases, when credit score is below 680, the FHA beats the Conventional loan on payment and long term net worth calculations. PMI cannot be removed at anytime during the term of the loan.
- VA – **Your must be a Veteran to Qualify**Loan amounts to $417,000, Credit scores to 620, but 640 works best, 0% Down Payment or 100% financing. In many cases, the low rate of the VA make it a great program at any down payment. I once did a 70% down VA, because the rates are so much lower than Conventional. There is no monthly PMI, but there is an upfront funding fee of 0 to 3.3% added to the loan amount.
- USDA – ***A USDA loan is only available in rural areas and the borrowers have income limits*** Credit scores generally need to be 640 plus, It is 100% Financing, there is a 2% upfront fee added to the loan amount and a .5% Monthly MI on the loan. This is a great 100% financing loan if your home and income meet the criteria
- Jumbo Financing – This is for loans in excess of $417,000, Credit scores need to be 680 plus, maximum 90% financing, but most lenders are at 80%
- Alternative Credit Financing – check out my Blog for Alternative financing at: https://danmckenzie.com/
Hope this helps make you smarter about the loan process!