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Traditional Home Loan Options For Every Borrower.

If your credit is good and you have some money in savings, there are a number of traditional loan options available to you. Even if your credit is less than perfect and you don't have money for a downpayment, you may qualify for a government backed product. Each loan type has its own benefits and drawbacks, so it's important to understand all of them before making a decision.

Conventional Loans

If you are a first-time home buyer or haven't purchased a home in some time, you are probably getting familiar with loan types. One of the most common loans is a conventional loan.


The simplest way to think about a conventional loan–it’s a private loan from a lender to purchase a house. These loans are not backed by a government agency and are provided by private companies (banks/lenders/investors); however, they may be sold to a government-sponsored enterprise like Fannie Mae or Freddie Mac.


Because they may be sold, conventional loans still need to conform to government lending rules set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).


Conventional loans typically offer low-interest rates, higher loan limits, and flexibility for borrowers with a down payment and good credit.


Talk to one of our mortgage loan originators today and find out if a conventional mortgage is right for you.

FHA Loans

Unlike a conventional mortgage, FHA loans are backed by the federal government. These loans allow borrowers to qualify for a mortgage with lower credit scores and a down payment of 3.5%. You have the option to put more money down if you wish.


FHA borrowers can even get up to 6% sellers assist to help cover closing costs. Remember, the actual amount is negotiated between the borrower and the seller.


The downside to an FHA loan is premium mortgage insurance (PMI). You will have to pay a monthly fee for insurance against the loan for the entire life of the loan increasings your monthly payments. You will also have additional closing costs to cover the additional risk of defaulting on the loan. This fee changes depending on market conditions. If you want to avoid PMI, you will need more money for a down payment and you will want to apply for a conventional loan.


Talk to one of our mortgage loan originators today and find out what loan program is best for you.

VA Loans

For eligible military veterans, these loans are up to 100% financing and are guaranteed by the United States Department of Veterans Affairs (VA). These are unique loans, and feature a zero down payment option for eligible veterans or their surviving spouses (provided they do not remarried).


Because of the VA guarantee, you must meet one of the following requirements.


  • Served 90 consecutive days of active service during wartime, OR
  • Served 181 days of active service during peacetime, OR
  • 6 years of service in the National Guard or Reserves, OR
  • You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.


Talk to one of our mortgage loan originators today and find out if a VA Loan is right for you.


USDA Loans

USDA loans are available to individuals and properties that meet specific guidelines for eligibility. In general, the home to be purchased must be located in an eligible rural area as defined by USDA. To determine a location of eligibility, contact one of our loan officers or visit USDA eligibility. In general, applicants must:


  • Have a household income that does not exceed 115% of the median household income.
  • Agree to occupy the dwelling as their primary residence.
  • Be a US citizen, US non-citizen national, or Qualified Alien.
  • Be unable to obtain conventional financing with no private mortgage insurance (PMI).
  • Not be suspended or debarred from participation in federal programs.


Talk to one of our mortgage loan originators today and find out if a USDA Loan is right for you.


DPA Opportunities

Down payment assistance (DPA) programs provide some or all of your down payment. These programs help low-income, and first-time homebuyers qualify for a loan quicker.


Some DPA programs offer monies in a grant that you do not have to pay back. Others provide the funding in some form of a loan with low or no interest. DPAs may have terms to repay the loan when you sell the home. Or the provider might forgive the loan once you have lived in the home for a certain number of years.


DPAs terms and qualifications vary because each program is unique. DPAs are generally developed and funded by non-profits and county programs.


Superior Mortgage Solutions to learn more about DPA programs in your county.


A Jumbo Mortgage

Jumbo loans are used to finance properties that are deemed too expensive by the Federal Housing Finance Agency (FHFA). These loans are considered risky and cannot be guaranteed by Fannie Mae and Freddie Mac, meaning the lender is not protected from losses if you default.


You can still qualify for a loan if you are buying an expensive property. Your underwriting criteria might be more extensive. You will also need to have good credit, a low debt-to-income ratio, cash reserves, documentation, and the property will require an appraisal.


Talk to one of our mortgage loan originators  today and find out if a Jumbo Loan is right for you.

ARM

Adjustable Rate Mortgages, which are an adjustable/variable rate instead of a fixed rate, can offer a variety of terms. While ARM loans are often seen negatively by many, they have some good attributes for the right borrowers including a low initial rate.


Once the fixed-rate portion of the term is over, and ARM adjusts up or down based on current rates. These rates do have some stipulations. They can only go up or down a given amount in any particular adjustment. Typically, the adjustment happens once per year. When the rate adjusts, the new rate is calculated by adding or removing margin from your rate. This is all dependent on the terms specified in your mortgage documentation.


Each time your interest rate changes, your payment is recalculated to pay off your loan by the end of your term. You will have a larger monthly payment or a smaller monthly payment, depending on your adjustment. Other than the margin in your loan documentation, there’s no limiting factor to how much your interest rate could adjust down in any particular year if interest rates have moved lower.


Talk to one of our mortgage loan originators today and find out if an Adjustable Rate Mortgage is right for you.

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