A Conventional Mortgage is the most popular type of home loan for buyers. It’s not backed by the government, which means it adheres to the standards set by Fannie Mae and Freddie Mac. These loans offer great flexibility with a variety of term lengths and down payment options, typically ranging from 3% to 20%. They are ideal for borrowers with strong credit, a stable income, and the ability to make a larger down payment.
Conventional loans also offer the potential for lower interest rates and private mortgage insurance (PMI) that can be removed once you've reached 20% equity in your home, making them a cost-effective choice in the long run. They're available for primary residences, second homes, and investment properties, providing a straightforward path to homeownership.
An FHA home loan is a government-backed mortgage insured by the Federal Housing Administration, designed to lower barriers to homeownership. This type of loan is a popular choice for first-time homebuyers because of its more lenient lending standards and lower down payment requirements, which can be as low as 3.5% of the purchase price.
FHA loans are also more forgiving when it comes to credit scores; borrowers with less-than-perfect credit may still qualify. Moreover, the closing costs can be covered by a gift from a family member or even a grant, making it even more accessible. While there is a mandatory mortgage insurance premium (MIP) that borrowers must pay, this loan type remains a go-to option for many because of its inclusivity and flexibility, helping a wider range of people step onto the property ladder.
A VA home loan is a powerful benefit for veterans, service members, and their families, offering an avenue to homeownership with notable advantages. Backed by the Department of Veterans Affairs, this type of loan is crafted to serve those who have served our country, presenting features such as no down payment, no private mortgage insurance (PMI), and competitive interest rates.
Eligibility for a VA loan is determined by service history, and the benefits can be reused. Borrowers can enjoy lower closing costs, and the possibility of 100% financing, making it easier to purchase a home without having to save for years for a down payment. The VA also imposes limits on buyers’ closing costs, adding to the financial relief.
A Non-Qualified Mortgage (Non-QM) loan is designed to provide home financing solutions for borrowers who do not fit the typical lending criteria. This type of loan fills the gap for those with non-traditional income sources or financial situations that make it challenging to obtain conventional, FHA, or VA loans.
Non-QM loans are beneficial for self-employed individuals, investors, and those with irregular incomes who may struggle to provide the standard proof of income required by traditional mortgages. They can offer more flexible income verification processes, such as bank statements or asset depletion loans.
While Non-QM loans do not adhere to the strict Consumer Financial Protection Bureau (CFPB) guidelines, they still require a strong ability-to-repay (ATR) assessment. They may come with higher interest rates or require larger down payments to offset the lender’s increased risk. Nonetheless, for the right borrower, Non-QM loans represent a viable path to homeownership when other doors may be closed.
Embarking on the home-buying process can be both thrilling and complex. At EasyWay Mortgage Corp, we simplify each step, guiding you from the initial dream to the final handshake. Here’s what to expect:
Found the one? Make an offer. We’ll help you determine a competitive yet fair price to propose to the seller.
Once your offer is accepted, it’s time to formally apply for a mortgage. We’ll walk you through every document and detail.
Ensure your future home is in good shape with a professional inspection and appraisal, safeguarding your investment.
Your loan goes through the underwriting process, where all your information is verified and approved.
Sign the paperwork, pay any remaining fees, and the keys to your new home are handed over.
We’re with you at every turn, ensuring each step towards homeownership is taken with confidence and clarity.
