Loan types covered:
- Conventional Loans
- FHA Loans
- USDA Loans
- VA Loans
- PMI will automatically drop off at 22% equity. This will typically take around 9.25 years unless more principal is paid than required.
- Minimum 3%-5% down payment.
- Typically lower monthly PMI than FHA.
- Only loan that allows financing of an investment property (minimum 15% down).
- Has a Jumbo option that allows for MUCH larger homes.
- Rates are typically around .25-.75 higher than FHA, VA or USDA depending on the credit score (There are Conventional adjustments to the rate based off the credit score. These are not lender adjustments but rather Fannie or Freddie adjustments. Fannie and Freddie insures Conventional loans).
- Seller can only pay up to 3% of the sales price toward closing costs and prepaids unless the borrower is putting 10% or more down (then 6% seller contribution is allowed).
- Stricter guidelines on ratios and credit.
- 3.5% down payment minumum.
- Seller is allowed to pay all of the closing cost and prepaids (but not the down payment) up to 6% of the sales price as part of the negotiations of the contract.
- Assumable loan (which could be valuable if you sell your home when interest rates are much higher than current market).
- Interest rates will typically be less than a Conventional.
- More flexible in credit and past derogatory (i.e., foreclosure, tax liens, collections, etc.).
- Only loan that typically allows a non-occupying co-signer.
- Lifetime monthly MIP (unless putting down 10% or more)
- Also has an upfront MIP fee that is rolled into the note.
- Monthly MIP is typically higher than a Conventional.
- Zero (0) down payment.
- Seller is allowed to pay all of the closing cost and prepaids up to 6% of the sales price as part of the negotiations of the contract.
- Interest rates will typically be lower than a Conventional loan.
- Only loan that allows the rolling in of closing costs into the loan amount as long as the houses appraises for more than the loan amount.
- Lifetime monthly form of MIP (an annual fee percentage tied to the loan amount, and paid monthly) called a guarantee fee.
- Also has an upfront guarantee fee of 2.75% that is rolled into the note. (As of October 1st, 2016 this fee will be reduce to 1%!)
- Financing/program available only for specific rural areas. You can check eligibility on the USDA website.
- Strict income limitation guidelines.
- Takes typically 1-3 week(s) longer to close than a standard loan as it is underwritten twice – once by the lender and once directly at USDA.
- Stricter guidelines on ratios and credit.
- Zero (0) down payment.
- Seller is allowed to pay all of the closing cost and prepaids up to 4% of the sales price + Title Policy + Survey + around $1,915 in VA non-allowables as part of the negotiations of the contract.
- Interest rates will typically be lower than a Conventional loan.
- Also has a Jumbo option that allows for MUCH larger homes.
- Upfront Funding Fee of 2.15 if never used your VA eligibility to purchase your home, or 3.3 if have used it before. (If borrower has a Service Connected Disability no Upfront Funding Fee is required.)
- The Funding Fee is rolled into the note.
- VA chooses the appraiser.
- Seller needs to agree to pay the VA non-allowables or the lender can pay with rebate pricing from a higher interest rate.
- Only loan type that requires a clear WDI (Termite) report.
to get started?
Take a look at our loan checklist page here to find out what you need to start working towards your dream of home ownership today!
“Loans are what we do, not who we are.”
– CEO, Steve Jacobson
This may vary depending upon the specific type of mortgage you are applying for, as different agencies will need to be involved in the process. Typically the process plays out in a month or less, though some will go quicker. It is not uncommon to have the mortgage application processed within 10 days. It is critical that you get the application entirely completed, so that you can avoid any delays along the way.
The main thing that can delay the approval of a loan is failing to properly and completely fill out the applications. It is also important that you be completely honest on the applications, as any discrepancies may cause delays. In addition, changing jobs, having a change in your salary, changing your marital status or taking on additional debt can delay the approval of a loan.
Closing costs include items such as taxes, title fees and hazard insurance. Sometimes what is included in closing costs varies, and it can be impacted by the negotiation process on the sale price of the home, as the homeowners may or may not cover certain closing costs. You’ll want to have some money set aside to cover your closing costs.
Prepaids are items that you as the homebuyer pay at closing. This is a payment before the actual due date. These may be necessary depending upon the details of the closing. They include taxes, hazard insurance and other various assessments.
After you close, you’ll receive a letter that includes all of the dates and information that you need. If you want further details while you are closing, you should inquire about the specific due date of the first payment.