There are many types of loans used for home mortgages. A number of them are government guaranteed or backed so as to minimize the risk to Lender’s. These types of loans have specific qualification, down payment, and rules in which to qualify, but generally offer the home Buyer some of the best rates and or terms! All other mortgage loans can generally be grouped into what are called Conventional Loans. One very important item to understand is that you will need a LOAN STATUS REPORT (LSR) document from a Lender to identify yourself as qualifying for a mortgage loan, and approximately how much. This simply is a brief statement, usually 1 page, that you can use to justify any offers you wish to make towards purchasing a home. Think of it as a pre-qualification letter from your Lender. Most contracts written in Arizona now require a LSR to be included as part of the contract.
A great place to visit to get detailed knowledge on the mortgage lending process would be the Mortgage Underwriters website.
VA Loans
VA Loans came into originated in 1944 through GI Bill of Rights. These Loans provided veterans with a federally guaranteed (loan insured) home with no down payment. This feature was designed to provide housing and assistance for veterans and their families. For details of qualification and certificates needed to apply for a VA Loan you can simply click VA Loans and find the needed information and forms to begin the qualification process. You also will need to select an approved VA Loan Lender to complete the process.
FHA Loans
FHA Loans originated during the Great Depression of the 1930s and are insured by the Federal Housing Authority or FHA. These loans are issued by federally qualified (approved) lenders under the qualifications and terms required by FHA. Under this program the qualifications and terms tend to be considerably easier than most Conventional Loans. Currently FHA loans require only a 3.5% down payment and credit scores as low as 620. For additional up to date details and answers to questions visit FHA Loans.
USDA Loans
USDA Loans were created, for the most part in 1991, as a way of increasing home ownership in rural areas. Since a great many areas of the Valley have grown quickly into known rural areas, these loans can be an excellent low cost way to finance a home in a newer developed location. The program of 100% financing plus a 2% USDA loan loss insurance fee (that often can be rolled into the loan amount) make this program an exciting source of financing. The funding for this program is at the mercy of congress so there are times that this program is not availiable pending additional funding. Since there needs to be a rural zone, or rural area designation, to even qualify, more information can be found at USDA Loans.
Conventional Loans
Conventional Loans is a term reserved pretty much to all loans not of the above types. These loans are pretty much the catch all for a wide variety that are not government insured like the above types. They can have Fixed or Variable rates, combination of both, and even variations in terms. Usually Conventional Loans require between 5% – 20% down payments. For a more complete definition and reasoning as to when to use this type of mortgage financing, see Conventional Loans.
Owner Carryback
Owner Carryback would be a situation whereby the Seller is willing to finance a portion or all the financing of your home purchase. This can be a very good source of financing especially if you are in a situation of unfavorable lending terms or qualification problems. Currently there are a number of businesses that work with Sellers to handle the Seller’s Carryback loans from a loan origination and servicing angle. For additional information please see Owner Carryback Loans.
Loan Sources Referrals
For sources of mortgage financing, you have an enormous number of sources online or direct. I have noted a few local sources of direct lending that you may use, or seek your own. Please see the Financing Referrals page or click the link Financing Referrals to see my local referrals.
