A conventional loan is a mortgage that is not guaranteed or backed by a government agency. Conventional loans are ideally better for the client who has excellent credit and can afford a down payment of 5% or more. Those who choose a conventional loan may need to bring more money to closing and potentially could require a larger down payment. The benefits of a conventional loan may include a better rate and a quicker turnaround time. Also, there is no need for mortgage insurance with a 20% down payment for primary, secondary or investment properties. You may opt for a Fixed Rate or an Adjustable Rate Mortgage or ARM.
- No private mortgage insurance (PMI) with a 20% down payment. Shorter-term PMI with less than 20% down.
- More expensive home purchases possible
- Available as fixed-rate and adjustable-rate mortgages
- Often require a 20% down payment. Some gift funds are allowed.
- May require less documentation and therefore take less time to process
A fixed-rate mortgage has an interest rate that remains the same for the life of the loan. In other words, your total monthly payment of principal and interest will remain the same over time. (Note: Your mortgage payments can fluctuate, though, if your property taxes or homeowner’s insurance rates fluctuate.) A fixed-rate mortgage is the most popular type of financing because it offers predictability and stability for your budget. Both a conventional loan and an FHA loan offer a fixed rate option.
An adjustable-rate loan (or ARM), is a home loan that starts with a low fixed interest rate for 3-10 years, followed by periodic rate adjustments for the remaining period of the loan. After the fixed terms of the loan, your adjustable-rate mortgage payments can increase or decrease with interest rate changes based on the terms of your individual loan and interest rate changes in the market. An adjustable-rate mortgage is often referred to as a "floating-rate mortgage" or a "variable rate mortgage."
An FHA Insured Loan is a Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower-income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium (MIP) is required.
- Down payments as low as 3.5%
- Entire down payment and closing costs can sometimes be covered with gift funds
- Extra funding available for renovations and repairs with FHA 203(k) program
Reliant Bank is honored to support those who serve or have served our country. VA loans are guaranteed by the Federal Government through the US Department of Veterans Affairs (VA). VA home loans allow veterans to buy or refinance a home with little or no down payment and are easier to qualify for than Conventional mortgages.
To be eligible for a VA loan, you have to be currently or formerly on active duty (181 days during peace time or 90 days during wartime), a National Guard or Reserve member for at least six years, or the spouse of a service member who has died in the line of duty or as a result of a service-related disability. You will need a valid Certification of Eligibility (COE) from the V.A.
A jumbo loan is very similar to a conventional loan, but with a loan amount that exceeds loan-servicing limits set by Fannie Mae and Freddie Mac—currently $510,400 for a single-family home in all states (except Hawaii and Alaska and a few federally designated high-cost markets, where the limit is $765,600.). Jumbo loans are a mortgage that is not guaranteed or backed by a government agency. A jumbo loan will typically have a higher interest rate, stricter underwriting rules and require a larger down payment than a standard mortgage.
You may opt for a Fixed Rate or an Adjustable Rate Mortgage or ARM.
- Fixed-Rate: A set rate for a 15-30 year period. The loan amount for a jumbo loan purchase or refinance is greater than $453,100.
- Adjustable-Rate Mortgage (ARM): The rate adjusts periodically. This is suited for the homeowner who is planning to sell within 5-7 years.
A Home Equity Line of Credit, or HELOC, is a mortgage loan option designed to help you use the equity in your home responsibly. With a HELOC, you have access to as much or as little of your home’s equity as you need. Competitive rates and flexible terms make this an attractive solution for borrowers.
HELOCs may be used for the purchase and/or refinance transactions on your primary residence or investment property. The loan may be the First Position as a primary mortgage or Second Position behind your first mortgage. Rates are variable and terms are typically shorter than a standard 15- or 30-year mortgage.