Mortgage Calculator

Federal Housing Authority loans best used for first time home buyers, or for those with lower income or lower credit. 

Requirements/More Information

• 3.5% Down Payment
• Up to 6% in Sellers Assist
• Always carries mortgage insurance of 0.85%
• 56% Debt to Income backend, 46% Debt to Income front end
• 580 minimum credit score

Pros/Cons:

• Pros: Better for those who have less saved to be able to afford a down payment. Also better for those with lower credit. Can use up to 6% in sellers assist to help afford closing costs. 
• Cons: Higher leverage loan, so will increase payments month over month, and will incur a 0.85% PMI charge each month. 

Your standard FANNIE MAE/FREDDIE MAC loans. Typically 30 years in length, with a fixed mortgage rate. 

Requirements/More Information:

• 3/5/10/20% (or more) down payment. Each percentage is technically a separate loan. NOTE: you cannot use a 3/5/10% conventional loan program if buying a multi family property, or one in which you would not owner occupy. 
• Up to 3% in sellers assist
• 3-5-10% conventional loans will carry mortgage insurance that will decrease incrementally as the amount in which you put down increases. Expect somewhere around 0.25-0.5% until you hit the 20% equity threshold. 
• 620 minimum credit score
• Need to show proof of income, last 2 mo. bank statements and proof of employment. 
• If self employed, you will need to show two years worth of income/tax returns. 

Pros/Cons:

• Pros: One of your more standard loan types. Often used, thus often understood. Less strict in appraisal process than FHA or VA loans. Less (or no) PMI
• Cons: Need better credit and (other than the 3%) more money to put down with less sellers assist.

Not necessarily a program (like FHA, VA, Conventional, etc.), but is a technique you can use to buy down your monthly interest rate and lower monthly payments. You can use money acquired via sellers assist to pay more up front to your lender of choice, and have them decrease your monthly interest rate incrementally depending on the amount in which you buy down the rate up front. 

Requirements/Additional Information:

• Amount of sellers assist, and loan requirements will depend more specifically on the type of loan you use (i.e. FHA, conventional, etc.)
• Must include a clause on the agreement of sale stating that the seller will buy down interest rate in order to use sellers assist money toward rate buy down. 
• Has to be for primary residence. Cannot be used for an investment property (depending on the company/program).

A loan program in which you can see, for a certain period of time, a decrease in the current interest below what the “prime rate” is (i.e. market rate), though will increase overtime incrementally based on which ARM you choose, and what the “prime rate” is.

Requirements/Additional Information:

• Can be a 3/5/7/10 year ARM. The lower the number (in years), the lower the rate is. 
  • Example: For a 3 year ARM, if the current interest rate is 7% (prime), you could get this ARM interest rate at 4.75-5%, but that 5% rate is only locked for the next 3 years. After this, it adjusts based on the market (i.e. could go up exponentially). 
• Many banks cap their rate at a 2% cap of the current interest rate you are quoted at. 
  • Example: using the same scenario as the one above, that 4.75-5% rate you were locked in at, you would be capped at 6.75-7% once the loan matures. 
• Same guidelines as Conventional loans.
• You will be underwritten (meaning determined to be approved for a loan) based on the worst case scenario of the interest rate for up to 5 years total. Any ARM over 5 years, they will UW based on the current rate of the ARM.

Pros/Cons:

• Pros: Creative way to decrease what your monthly payment is month over month during times of high interest rates (such as the time we’re living in now). If rates also decrease in time, you can refinance out into a fixed rate loan.
• Cons: Your monthly payment will increase above what you originally start paying the home for. You should pursue this type of loan program with the expectation to determine what you’re comfortable paying at the rate the loan will mature at. 

The go to loan program for veterans.

Description/Requirements:

• 0% down (lender funds 100% of the loan)
• No PMI
• There is a funding fee that will be placed on top of the loan. It can upwards of 3% on top of the loan. If you have a service related disability, they will waive this funding fee. 
  • Example: If you purchase a house at $100,000.00, you’d have a loan of about $103,000.00 that your payment would be based around. 
• Eligibility requirements
  • Need form DD214
  • Certificate of eligibility
  • 180 days war time active duty
  • 6 months of peace time active duty
  • Can’t have dishonorable discharge

Pros/Cons: 

• Pros: 100% funding with no PMI
• Cons: Not many realistically. Obviously must have served without being dishonorably discharged. Be cognisant of the funding fee on your loan as well.