A conventional mortgage refers to any loan that is not insured or guaranteed by the federal government, as opposed to government-insured loans including Federal Housing Administration (FHA), U.S. Department of Veteran Affairs (VA) and U.S. Department of Agriculture (USDA). Conventional mortgages (whether conforming or not) typically have a slightly higher down payment than government loans; however, this loan option normally provides more flexibility with fewer restrictions.
If you have good credit and stable income, a conventional loan might be the right option for you since it offers:
✓ Lower interest rates for borrowers with good credit
✓ Flexible mortgage insurance options
✓ Fewer penalties and fees
✓ Flexible loan terms
Home loans insured by the Federal Housing Administration (FHA) can make it easier for you to qualify to purchase or refinance a Greenville home. This loan option offers flexible qualification guidelines to help people who may not qualify for a conventional mortgage.
FHA loans are widely used by first-time homebuyers and people with low-to-moderate incomes since this government-insured mortgage features:
✓ Low down payments
✓ Flexible income and credit requirements
✓ Fixed- and adjustable-rate mortgages
✓ Loans for 1-4 unit properties and condos may be available
✓ Down payment funds can be a gift from a relative or employer
✓ Home sellers can contribute up to 6% of the closing costs
Home loans backed by the Department of Veterans Affairs (VA) provide affordable home financing options for eligible Service Members, Veterans and surviving spouses.
Since VA loans often require no down payment* with lower closing costs, you can help keep your savings secure. VA loans also feature:
✓ No prepayment penalties
✓ No private mortgage insurance (PMI)
✓ 100% financing with full VA entitlement
✓ Fixed- and adjustable-rate mortgages
✓ VA financing fees can be “rolled” into the loan amount
✓ Variety of eligible property types, including townhomes and VA-approved condos
Home loans guaranteed by the United States Department of Agriculture (USDA) provide affordable financing options for properties located in designated small towns, suburbs and exurbs. This program helps eligible low- to moderate-income families achieve homeownership by offering a no down payment option.
With flexible requirements, USDA loans feature:
✓ 100% financing + required guarantee fee = 102% of the appraised value
✓ Low FICO score requirements
✓ Low interest rates
✓ Low closing costs
✓ Gift funds can be used for closing costs
✓ 30-year, fixed-rate mortgage
✓ USDA Mortgage Eligibility
Eligibility is based on the property size, location and condition along with income and other qualifying factors. Some of these requirements include:
✓ Property must be located in a USDA designated rural area
✓ Maximum loan limits vary based on location
✓ Household members can have a total income of up to 115% of the medial income for the area
✓ Household must be able to afford the mortgage payment, including property taxes, homeowners insurance and the annual guarantee fee payable on a monthly basis
A reverse mortgage is a way to turn the equity in your home into cash which is usually tax free* without having to make monthly mortgage payments. Instead of monthly payments, the loan is taken against a senior’s home equity and repaid in one lump sum when the last borrower leaves the home. As part of the loan, the borrower is required to continue paying property taxes, insurance and maintenance (and HOA fees, if applicable). These loans can potentially help seniors gain financial independence from increasing living expenses.
*This information does not constitute tax advice. Please consult a tax advisor regarding your specific situation.
Reverse Mortgage Eligibility
✓ Borrower(s) must be 62 years or older
✓ Must be homeowner and either own home outright or have significant equity; must live in home as primary residence (live there 6+ months per year)
✓ Property must be a single-family home, 2- to 4-unit dwelling or FHA-approved condo
✓ Must meet minimal credit and property requirements
✓ Must receive reverse mortgage counseling from a HUD-approved counseling agency
✓ Must not be delinquent on any federal debt
An adjustable-rate mortgage (ARM) is a loan term option with interest rates that can change periodically after the initial fixed-rate period. After this introductory period, monthly payments are susceptible to increases or decreases based on market fluctuations, which can also affect the monthly payment.
An ARM might be the right option for you if you plan on moving within 7 years since they feature lower introductory interest rates. If interest rates are expected to fall, a Greenville homeowner could potentially reduce their monthly payments with the lowered interest rates. Highlights of an adjustable-rate mortgage include:
✓ Lower initial monthly payments
✓ Possibility to qualify for higher loan amounts
✓ Rates and Payments may decrease based on the index rate
A jumbo loan, or non-conforming mortgage, allows you to purchase more expensive homes with a loan amount above the conforming limit set by the Federal Housing Finance Agency. In most areas of the country, the conventional conforming loan limit is $453,100; however, the limit is $679,650 in higher cost areas.
If you have a low debt-to-income (DTI) ratio and a higher credit score, but you don’t have enough funds to bring the loan amount under the conforming limit, a jumbo loan might be the right option for you. Highlights of non-conforming loans include:
✓ Finance a home over the maximum loan amount established by the Federal Housing Finance Agency
✓ Higher purchase limits allow borrower to purchase more house
✓ Convenience of one loan for the entire loan amount
✓ Primary residence, second home or investment property
✓ Fixed-rate or adjustable-rate mortgages (ARM)
When shopping for a home, you may come across properties that aren’t quite what you’re looking for but have the potential to be your dream home with some repairs or renovations. With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan – saving you time and money.
HomeStyle Renovation Loan
You can use a HomeStyle renovation loan to cover costs of repairs, remodels, renovations or energy-efficient improvements on a primary residence, a second home or an investment property. There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property, add value to the property, and be completed by a licensed contractor.
Limited 203(k) Rehabilitation Mortgage
In addition to funding your new home, an FHA Limited 203(k) can provide up to $35,000 (including a contingency reserve) in additional funds to help make a few non-structural repairs or renovations such as updating a kitchen or bathroom, adding new flooring, purchasing new appliances, or repairing the roof.
Standard 203(k) Rehabilitation Mortgage
If your potential dream home needs more than $35,000 in renovations or the repairs are structural, the Standard FHA 203(k) might be the right solution. This program removes the restrictions of the limited option to allow for major home remodeling. A Standard FHA 203(k) can provide additional funds* to help with eligible repairs including moving or removing walls, minor pool repairs, and landscaping.