2016 Mortgage Loan Programs

2016 Mortgage Rate Factors
2016 Mortgage Rate Factors
May 18, 2016
2016 Mortgage Process Timeline
2016 Mortgage Process Timeline
May 19, 2016
2016 Mortgage Loan Programs

2016 Mortgage Loan Programs: Programs Introduction

There are many types of programs in the 2016 Mortgage Loan Programs.  I am hoping that this article will help inform you on the programs and assist in determining which loan is best for you.  Given the different nature of these programs, it can be overwhelming, especially if you have no clue what it is you are looking for.  Besides the mortgage programs that are out there, there is a large amount of rules and regulations that are updated and changed every year, so having a professional in your corner is key.  You have to first understand that not every borrower will get approved for every loan program.  Let’s say for example you had an earlier mortgage that was discharged as part of your bankruptcy, you may not be able to qualify for an FHA loan, but at the same time, if it has been more than 4 years from the discharge date, you may be able to get approved under a conventional loan.

There are so many variables when to choose from when selecting the mortgage that is right for you that you have to ensure the 2016 Mortgage Loan Programs you choose suits your needs as a borrower.  2016 Mortgage Loan Programs also have down payment barriers when trying to get approved for a loan.  Since all the 2016 Mortgage Loan Programs have different down payment requirements, you need to know what you are getting into.  For example you have VA and USDA loans that don’t have down payment requirements while FHA loans have a 3.5% minimum down payment and conventional loans can go as little as 3-5%% down.  In the case of VA loans, you must be a Veteran with Certificate of Eligibility to qualify for the loan or else you will be declined.  With USDA loans, the property needs to be in a USDA designated area or the loan will not be approved.

2016 Mortgage Loan Programs: Fixed Rate vs. Adjustable Rate

2016 Mortgage Loan Programs has two types of loans that will be offered, fixed rate mortgages and adjustable rate mortgages.  The most popular mortgage is a fixed rate mortgage with a 30 year term.  The fixed rate loan is a loan that has a consistent payment amount for 360 months and the only amount that changes is the amount of principal and interest.  Per the design of the loan, the longer you pay, the more principal you will pay and the interest will reduce.  Besides the 30 year fixed rate loan, there are also 15 year terms as well.  These are the 2 main types of fixed rate loans, but you could see terms from 10-40 years.

The other type of 2016 Mortgage Loan Programs is the adjustable rate mortgage or ARM for short.  Typically these types of loans are for those individuals who do not intend to stay at a home for an extended period of time.  Initial rates for these loans are lower for the introductory period which is normally 3 to 7 years.  These loans are represented as 3/1 ARM, 5/1 ARM, or 7/1 ARM.  After the introductory few years, the characteristics of the loan allow for the loan to adjust to a market rate.  The ARM rate is made up of an index rate (typically LIBOR) and a constant margin.  For example, when the time for the ARM to adjusts happens and the LIBOR is 5% with a 2% margin on the loan, the next year you will be paying a 7% rate.  These adjustments will happen annually after the introductory period is over.

2016 Mortgage Loan Programs: Conventional Loans

2016 Mortgage Loan Programs also has conventional loans which have their guidelines determined by Fannie Mae and Freddie Mac, the two huge government sponsored entities.  Unlike FHA, VA, and USDA conventional loans are not guaranteed by the government, therefore for this program you need to put at least 20% down or you run the risk of having to pay for private mortgage insurance or PMI.  There are also different loan types amongst conventional loans that have different down payment required.  For a single family home for will need 5%, second homes will require 10%, and investment properties will require 15%.  2016 Mortgage Loan Programs for conventional loans also states that a minimum FICO score of 620 is needed to obtain a loan and the maximum debt to income ratio needs to be 45% or conventional loan will not work for you.  There are also mandatory waiting periods after bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sales.  2016 Mortgage Loan Programs requirements for FHA loans say that you must wait:

–          4 years after a chapter 7 bankruptcy discharge date

–          2 years after a chapter 13 bankruptcy discharge date

–          4 years after a deed-in-lieu of foreclosure

–          4 years after a short sale

–          7 years after a foreclosure

2016 Mortgage Loan Programs: FHA Loans

2016 Mortgage Loan Programs for FHA Loans is the most popular loan in the United States primarily for the fact that FHA loans have the most lenient guidelines of all the loans available.  FHA loans will allow for a low down payment, lower credit scores, and higher debt-to-income ratios.  The minimum down payment for an FHA loan is 3.5% and the minimum FICO score for an FHA loan is 580.  FHA will also issue loans to borrowers who have FICO scores from 500-579 if they can put 10% down.  FHA also allows for a maximum DTI ratio of 56.9% which is the most of any 2016 Mortgage Loan Programs.  2016 Mortgage Loan Programs requirements for conventional loans say that you must wait:

–          2 years after a chapter 7 bankruptcy discharge date

–          1 year into a chapter 13 payment plan or the next day after a chapter 13 bankruptcy discharge date

–          3 years after a deed-in-lieu of foreclosure

–          3 years after a short sale

–          3 years after a foreclosure

2016 Mortgage Loan Programs: VA Loans

2016 Mortgage Loan Programs for VA loans is an excellent product for veterans.  VA loans have 100% financing available with $0 down payment needed.  Another huge plus for VA loans is that there isn’t a monthly mortgage insurance payment to be made either as there are with most other loans that don’t have 20% down.  Mortgage rates on these loans will also be some of the lowest around as they will typically be lower than FHA, USDA, and conventional loans.  If there is one thing a veteran needs it is they NEED their Certificate of Eligibility or they will NOT get a VA loan.  There is also no credit score or a debt-to-income requirement on VA loans but it is up to the discretion of the VA mortgage lender.  As you can see, out of all the 2016 Mortgage Loan Programs VA loans is one of, if not the most lenient loan types out there.  2016 Mortgage Loan Programs requirements for VA loans say that you must wait:

–          2 years after a chapter 7 bankruptcy discharge date

–          2 years after a deed-in-lieu of foreclosure

–          2 years after a short sale

–          2 years after a foreclosure

2016 Mortgage Loan Programs: USDA Loans

2016 Mortgage Loan Programs for USDA loans also offer 100% financing and must also be in a USDA Rural Development Area in order to qualify for a USDA loan.  The borrower also needs to meet the maximum household income guidelines set by the USDA Rural Development in order to qualify as well.  Maximum debt-to-income ratios for USDA loans are a lot less than other loans as they are 41% and most lenders will require a 640 FICO score to make the loan happen.  Finally, 2016 Mortgage Loan Programs requirements for USDA loans say that you must wait 3 years after bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sales.

2016 Mortgage Loan Programs: Jumbo / Non-Conforming Loans

2016 Mortgage Loan Programs consider Jumbo mortgages non-conforming due to the fact that these loans do not conform to Fannie Mae or Freddie Mac maximum loan limits of $417,000.  For all mortgages over $417,000 you will be required to get a Jumbo loan.  Given this, lending requirements are much more strict than other loan programs due to the size of the loan.  Most lenders are going to want a FICO score of 680, a debt-to-income ratio of 40% or less, 3 months of reserves in the bank, and no bankruptcies or foreclosures in the past 7 years.  There will also most likely be a down payment requirements of at least 20%.  These loans are very selective and each loan is done on a case by case basis to ensure borrowers meet all the specified criteria.

In conclusion, if you need a professional to help guide you through all the confusion of the 2016 Mortgage Loan Programs, you have found the right person and you can reach me any tim at 888-900-1020, email me at contact@loanconsultants.org, or inquire through my website www.loanconsultants.org.  I look forward to getting you in the home of your dreams.

Leave a Reply

Your email address will not be published. Required fields are marked *