Conventional loans are the most popular program available. The housing market has stabilized, and lenders are signalling they are opening up from the very strict guidelines of the recent past. Conventional lending is now being done with common-sense underwriting guidelines once again.
Recent Conventional Highlights include:
- Purchase loans with only 3% down payment – All of the 3% down payment can be a gift.
- One year self-employed income can be enough for self-employed borrowers.
- Maximum number of financed properties for a borrower can be 5+
- Investment Purchases up to 85% loan to value.
A reverse mortgage is a home loan for seniors aged 62 years or older. Reverse mortgages allow homeowners to convert their home equity into cash with no monthly mortgage payments. The biggest misconception is that reverse mortgages are part of a government assistance program, but this is false. Reverse mortgages are just another type of mortgage.
Reverse mortgages are often used to pay for home improvements, medical expenses and daily living expenses. Homeowners sometimes use a reverse mortgage to pay off an existing conventional mortgage to eliminate their monthly mortgage payments. The borrower must continue to pay property taxes and insurance on the property.
Reverse mortgages use the home equity as collateral for the loan. The loan amount is determined by the age of the youngest borrower, the current interest rates, and the lowest appraisal value, sale price and maximum lending limit.
Typically a reverse mortgage loan does not have to be repaid until 6 months after the last surviving homeowner moves out or dies. Then the homeowner’s estate will likely sell the home to repay the balance due of the reverse mortgage, and the heirs of the estate may receive any remaining equity. If the sale of the home is less than the payoff amount, the estate is not liable for the additional mortgage debt. The homeowner’s heirs can also purchase the property outright if they choose.
FHA recently dropped the monthly mortgage insurance premiums. This loan program is once again a great way to finance a purchase or refinance.
Everyone has heard of the FHA loan, but we’re not so sure that people really understand what it is all about. FHA is still the go-to program for borrowers with lower credit or little credit.
FHA does not hit your interest rate for low credit the way Conventional loans do. A credit score below 680 on a conventional loan has overlays and price adjustments. At a certain point the FHA loan becomes a much better deal. With FHA you can get a much lower rate and much better deal if you have a lower credit score. Generally speaking, if your credit score is between 580 and 660, an FHA loan is the way to go.
And one final note. FHA guidelines change all the time. We will update our site with current changes.
VA Loans for Veterans, and Active Duty
If there is one thing the Department of Veteran Affairs got right, it is the VA loan. Your well deserved VA benefits can qualify you for the best mortgage loan available in the universe, hands down. With a VA loan you can have:
- The very lowest rates available on all standard loan terms.
- 100% financing no-down-payment available on your purchase loan.
- 100% financing available on a cash-out loan.
- No mortgage insurance ever no matter what the Loan to Value.
- Very low fees and closing costs.
We have done hundreds of VA loans and we know the ins and outs of the process. VA loans are different than Conventional or FHA loans. The appraisal process is a little different, the documentation required is a little different, and the VA underwriters are looking at the file with a slightly different eye. Do not let someone steer you away from a VA loan if you are VA eligible. Because the VA loan has its own special characteristics, it requires a certain expertise and experience from your lender. Colorado Mortgage Group has this expertise and we always look forward to speaking with you about your next VA loan.
The VA Interest Rate Reduction Refinance Loan is a remarkably simple and easy way to refinance your VA loan. Highlights include:
- Lower Your Monthly Payments
- Lower Your Interest Rate
- No Appraisal Required
- Reduced Paperwork and Documentation
Jumbo loans are becoming more common in Colorado because of increasing home prices. Technically speaking a Jumbo loan is a non-conforming loan. That is, the loan amounts are too high to fit into Fannie Mae, Freddie Mac, or Ginnie Mae loan specifications. This means that each lender will write their own guidelines to fit their own lending niche. We always expect our Jumbo loan clients to shop around. We know that a buyer who needs a Jumbo Loan will consider multiple lenders and will settle on the best option only after doing their due-diligence; after all, one-eighth of a percent on the interest rate of these loans can make a big difference to the bottom line. Colorado Mortgage Group is confident in our competitive rates, our expertise, and our ability to close your loan on time with no surprises.