real-estate, refi, mortgage, SDIRA, trust
April 24, 2021

Mortgage Types

Conventional Loans, Confirming Loans, Government Loans, FHA Loans, VA Loans, USDA Loans

Conventional Loans

  • The borrower must pay PMI (private mortgage insurance) if loan to value > 80% (downpayment < 20%)
  • PMI is waived if the loan to value reaches 80%
  • Not guaranteed or insured by the federal government
  • Types of homes: primary residence, rental/investment property, second/vacation home, or a property you plan to fix up and flip
  • Loan types: conforming loans and non-conforming loans
  • FICO credit score: 620+

Conventional conforming loans

  • Guided by Fannie Mae or Freddie Mac
  • Loan limit: $548,250 (high-cost areas: $822,375)
  • Downpayment: 5% (for first-time homebuyer: 3%)
  • High DTI (Debt to Income): 43-50%

Conventional non-conforming loans

  • No loan limits
  • Downpayment: 20%
  • Security: 6-12 months of saving
  • Loans: jumbo loans, portfolio loans, and subprime loans

FHA Loans

  • Insured by Federal Housing Administration (FHA)
  • Loan limits: $356,362-$822,375 (depending on the area)
  • Minimum downpayment: 3.5%
  • Credit score 580+ with down: 3.5%
  • Credit score 500+ with down 10%
  • The borrower must pay MIP (Mortgage Insurance Premium)
  • Upfront: 1.75% PMI
  • High DTI (Debt to Income): 57%
  • First-time homebuyers

VA Loans

  • Guaranteed by U.S. Department of Veterans Affairs (VA).
  • The borrower must be a member of the U.S. armed forces, veteran, reservist/national guard member, or an eligible surviving spouse.
  • No minimum downpayment
  • No minimum credit score
  • No insurance
  • Types of homes: primary residence
  • One-time charge: 1.25-3.6%

USDA Loans

  • U.S. Department of Agriculture
  • Income limited
  • USDA-approved areas
  • The borrower must be a U.S. citizen or a permanent resident
  • Credit score: 640+
  • Types of homes: primary residence
  • No minimum downpayment
  • Upfront guarantee fee: 1%
  • Annual fee: 0.35%

Other types of loans?