What is a Conventional Loan?

a type of loan that appeals to most buyers.

Conventional Loans are offered by private lending investors and are available in fixed and adjustable interest rates with varying terms, but in the current lending environment, 15 and 30 fixed rate terms are the norms. As long as you can meet the down payment requirements for this loan type, it is a fantastic option for any homebuyer.

Call us to discuss your options!

What is a Jumbo loan?

Loan amounts over $802,650

Whether you have a large family and need room for everyone, or your Houston dream home is in a more expensive city or neighborhood in Houston, you will likely need to borrow a sizeable amount of money. Conventional lenders are subject to limitations on the amount of money they can lend. Unless you have the available cash to place a down payment that would reduce the principal borrowed, you may not be eligible for a conforming loan.

A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). As of 2020, the limit for conforming loans is $510,400 in most areas, while in higher-cost regions, the limit is $765,600. Unlike conventional loans backed by government entities like FHA, Freddie Mac, or Fannie Mae, jumbo loans are provided by private lenders.

If your loan will exceed $1 million, you may or may not need to obtain two separate appraisals. If it exceeds $2 million, you must get two appraisals.

Refinance: The amount of equity you must have in the home will vary with the loan amount. For example, you would be required to have a minimum of 20% equity for a loan of up to $1.5 million and 40% to borrow up to $3 million

The amount of cash you can take from a refinance depends on the amount of equity in your home. You must maintain a minimum amount of capital based on the loan amount.

• • • Under 40% equity in your house — up to $350, 000 cash
    • 40%-50% equity in your house — up to $500,000 cash
    • 50% or more equity in your home — up to $750,000 cash

Investment Property: You may get a jumbo loan for investment properties of 1-2 units with a 40% down payment or equity for a loan up to $1 million.

Land Purchase: You may get a jumbo loan for homes with land up to 40 acres. However, special conditions apply when the amount of land exceeds 20 acres.

• • • It requires 10% additional down payment
    • The appraiser must have two comparable properties within 5 acres of the property you want to buy
    • The value of the land must not exceed 35% of the combined value of the house and land

What is a va loan?

Mortgage Options for Veterans

A VA Loan is a guaranteed mortgage loan supported by the U.S. Department of Veteran Affairs that allows veterans to obtain home mortgages without a down payment.

The VA determines the eligibility and insurance of the loan while a private lender dispurses the loan.  Eligible Veterans are those who served on active duty and have a discharge, other than dishonorable, after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime.

What is an fha loan?

Available for purchase or refinance

Private lenders issue FHA loans. The Federal Housing Administration (FHA) loan is insured by the federal government, which imposes less stringent approval guidelines.  First-time homebuyers like FHA Loans, as their family members can supply gift funds to help with closing costs and allow for lower down payment and FICO scores than traditional Conventional loan options.

Unlike USDA and VA loans, the FHA program does not offer zero-down mortgages. The FHA offers loan options for homebuyers with credit scores as low as 580, requiring a minimum down payment of 3.5%.  It’s important to note that if closing costs are included in the loan, they become part of the total amount used to calculate the down payment.

FHA loans are especially useful for first-time homebuyers, lower-income buyers, and people with lower credit scores. However, it’s not exclusively reserved for this demographic. 

FHA loans have no income limits, but buyers must demonstrate their ability to meet monthly payments, which is assessed through their debt-to-income ratio. Additionally, local housing prices can influence the amount a lender is willing to approve.

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What is a usda loan?

low rates, zero down, affordable

USDA loans are a government-backed mortgage program designed to help low- to moderate-income borrowers purchase homes in eligible rural and suburban areas. These loans offer benefits such as no down payment, low interest rates, and reduced mortgage insurance costs. Eligibility is based on income limits, the location of the property, and the applicant’s creditworthiness. USDA loans aim to promote homeownership in rural areas and help buyers who may not qualify for conventional loans.

Connect with me today and I can help you determine if the property is located in a qualified USDA area, tell you the current income loan limits, and help you structure your USDSA loan options.

What is a DSCR loan?

investment properties

If you are a real estate investor looking to expand your investment portfolio, this program was created just for you.

No need to stress about qualifying with personal income. With a DSCR mortgage, the cash flow from your investment properties are used for qualifying purposes.

Ready to expand the number of investments you own?  Call to see if this program is the right fit for you.