Today, Terry Schenck is back to answer some questions about common types of home loans. What are the kinds of home loans you can get?
(Terrence V. Schenck NMLSR ID 193123 Senior Loan Officer, Prosperity Home Mortgage 13135 Lee Jackson Mem Hwy, suite 100 Fairfax, VA 22033 Phone (703)408-3978 | Fax (703) 293-4298 firstname.lastname@example.org)
There are two types of loans, government and conventional. Then, there are different kinds of loans under those two types. Different types of government loans include VA loans, which are specifically for veterans if they are eligible and have served for a specific amount of time. There are also FHA loans, or Federal Housing Administration loans, and state-specific financing, such as VHDA for Virginia.
With conventional loans, there are conforming and non-conforming loans. What is a conforming loan? Fannie Mae and Freddie Mac are the largest mortgage purchasers in the secondary market. They provide the cash flow to our industry, and they set the rules for lenders. Conforming means the loan that we underwrite conforms to their rules.
“It’s so important to work with someone local.”
Fannie Mae and Freddie Mac set the loan limits every year, and it’s different in every state and county. That’s why it’s so important to work with someone local. Right now in northern Virginia, our limits are at $625,500 for high performing and normal is $417,000 or lower.
It’s also important to know that you don’t have to put down 20%. Conforming loans start with putting 3% down for a first-time home buyer. Rates and terms will change. Typically the more you put down for a down payment the better your rate and terms will be.
If you have any other questions, feel free to give Terry a call or shoot him an email!