Welcome to a better mortgage experience! In just few minutes you can find out what you qualify for and explore multiple loan options and interest rates.
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It is also useful to understand the essential differences in types of loans available from a mortgage company. There are really only three basic types of loans:
Loans are also classified as either government loans or conventional loans.
Conventional loans are further broken down into either conforming or non-conforming loans. To qualify as a conforming loan, also known as an “A-paper loan,” it must fall under guidelines established by Fannie Mae and Freddie Mac. These corporations have set industry standards and guidelines that govern credit requirements, down payment amounts, and maximum loan amounts.
Borrowers with flawed credit who do not meet the above requirements can often still qualify for what is known as a non-conforming loan (B-, C-, or D-paper loans).
While these are the general types of mortgages available for homebuyers, it is still important to look with your mortgage company at the specific loans you qualify for in order to determine the right one for your unique needs.
Your loan options are based on your credit score, which can be limited by poor credit. Your credit score is calculated using a system of points earned based on your credit history. This three-digit number (ranging from 300 to 900) is influenced by a range of factors, including:
There are three major credit bureaus (Experian, Equifax, and TransUnion) that produce comparable credit scores using some version of FICO, the industry standard that was developed originally by Fair Isaac and Company. Most mortgage brokers use this credit score to determine your qualifications for a loan, so you should look into how to increase your credit score before you apply for a mortgage.
The bottom line is that you should start with your credit score and end with the specific loan type that is most appropriate to your needs. Once your loan closes you will also need to consider a few other hidden costs of buying a home that can affect your monthly payment. Contact us directly for assistance throughout the process.
Download our free homebuying guide to make sure you fully understand the HOMEBUYING PROCESS. We look forward to not only making this home buying experience a success, if a better suited program becomes available we will revisit your financial situation. Our goal, is to be your mortgage lender for life.
