FHA LOANS are government insured 96.5% loans with a minimum of 3.5% downpayment. FHA limits vary by county. One advantage of the FHA loan is their credit standards make it easier for people with "blemished" credit or no credit to get their loan approved. The program also allows the buyer to have the seller pay their closing costs and in some cases much of their down payment. All down payment can also come from a documented source such as a close friend or relative. FHA loans, which are assumable by a qualified buyer, offer both fixed and adjustable rate mortgages. These loans are only for owner occupied properties.
CONFORMING LOANSare loan amounts of $625,500 or less. Traditional lenders make these loans and usually sell them to the secondary markets Fannie Mae or Freddie Mac. With loans to 90% of the purchase price you can put down as little as 10% of your own funds. These loans are available to the clients with good credit. Loans of $417,000 and less received preferred rates.
JUMBO LOANS are loans from $625,501 and up. They are traditionally at slightly higher interest rates.
Information on this page is for educational purposes only. Specific questions for real property transactions and credit items should be directed to your attorney, tax preparer and C.P.A.. Copyright 2011, reprint by permission only