If you want to apply for a home loan, doing your homework is necessary to ensure that you are on the right track. The goal is to find the best possible deal in the market today, and the key to doing that is getting prepared.
One of the most important things to do to realize your goal above is to familiarize yourself with different types of mortgages, Dallas, TX. So, in this post, we have provided the information you need.
There are several types of mortgage loans in the market; however, we can classify them into two main categories: (1) Conforming loans and (2) Nonconforming loans.
In conforming loans, you will often hear “mortgage term” to refer to conventional mortgage only. The mortgage types, Dallas, TX, under conforming loans, are those that can be purchased by Fannie Mae or Freddie Mac.
To qualify under conforming loan, it should be:
- Below the maximum dollar limit, which is $548,250 (single-family homes)
- Not a federally backed loan (example: not backed by the US Department of Agriculture and FHA)
- Meeting lender-specific criteria (example: you must have a credit score of at least 620 to qualify)
Under the conforming loans, we have:
- Conventional mortgages – the most common type of mortgage loan; private financial lenders fund these loans;
- Fixed-rate mortgages – these are loans having the same interest for the entire duration of the loan;
- Adjustable-rate mortgages (ARM) – just the opposite of a fixed-rate mortgage; they are typically 30-year loans with interest rates that are dependent on how the market rates move.
Under the nonconforming loans (government-backed), we have:
- FHA loans – mortgage type insured by the Federal Housing Administration. An FHA loan can allow you to buy a home with a credit score as low as 580 and a down payment of 3.5%.
- USDA loans – are insured by the United States Department of Agriculture. USDA loans have lower mortgage insurance requirements than FHA loans and can allow you to purchase a home with no downpayment
- VA loans – are insured by the Department of Veterans Affairs. A VA loan can allow you to buy a home with $0 down and lower interest rates than most other types of loans.
- Jumbo loans – borrowers need a jumbo loan if the value of the property purchased is higher than conforming loan limits.
Your mortgage broker should explain to you in detail the different types of mortgages, Dallas, TX.
Online looking for a reputable mortgage broker in Dallas, TX? Talk to HomePlus Mortgage today. Please call: (512) 949-3385