Loan Products
VA LoansVeterans Administration, or VA, loans are available to most veterans of military service. The veteran must apply for and receive a certificate of eligibility from the Department of Veterans Affairs. Some reservists may also eligible for VA loan benefits.
VA loans are a great source of financing because the purchasing veteran has no down-payment requirement and can therefore purchase a home with no money down. There is an associated funding fee the veteran will finance in addition to the purchase price of the home. This funding fee takes the place of any private mortgage insurance that would normally be paid for taking out a loan of more than 80 percent of the appraised value of the home. Conventional Loans
Conventional mortgage loans are designed for borrowers who demonstrate good repayment histories and present a minimal credit risk. This type of loan can have a fixed rate or an adjustable rate and will fall under guidelines of either the Federal National Mortgage Association, called Fannie Mae, or the Federal Home Loan Mortgage Association, called Freddie Mac. Currently the maximum loan under conventional guidelines is $417,000. If your loan exceeds this amount, it is classified as a jumbo loan, for which rates are slightly higher.
If you purchase a home using conventional loan guidelines, you will need to put at least 5 percent down from funds verified to have been in your account for at least 60 days. You will also have to cover any applicable closing costs. If you refinance under conventional guidelines and don't take any cash out at closing, you could be eligible to refinance up to 95 percent of the appraised value of your home. If you refinance and take cash out, you could be eligible to take out up to 90 percent of the appraised value of the home. Anytime you exceed 80 percent of the appraised value of the home, you will be required to pay a private mortgage insurance premium that insures the lender in case of default.
The loan repayment terms on these programs can for 10 years, 15 years, 20 years or 30 years. Non Conventional (Subprime) Loans
These loans are for borrowers who do not fall under FHA, VA or conventional loan guidelines. Typically, these borrowers either have credit blemishes such as late payments, previous bankruptcies or foreclosures that prevent them from qualifying for other types of programs. In some instances, the borrowers have great credit but are trying to borrow an amount in excess of conventional loan guidelines. Rates for these types of loans generally exceed conventional loans by 1%-3%." Second Mortgage Loans/Second Mortgage Lines
Second mortgage loans are subordinate to first mortgages. This means that the lender making these loans would be paid only after the holder of the first mortgage in the event of a foreclosure. The rates on these types of loans are slightly higher than those for a first mortgage because the lender is assuming more risk. For more detail on these types of loan programs, please go to the questions tab on our home page.
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