Mortgages, Mortgages, & Mortgages
Loan programs come in many forms and come from many sources. Just as the loan
structure, like a 30
year fixed rate mortgage, can affect your interest rate and monthly payments,
the source of funding for your loan can also affect your rate and payments.
The source of funding can also affect the amount of your down payment and closing
costs. Mortgage Loan Outlet offers low payment mortgages for refinance and home purchasing
If you have at least 3% of the loan amount to use as a down payment, you may
consider the most common type of loan, a conventional loan. These loans consist
of conforming loans, which are secured by government sponsored entities (GSE)
such as Fannie Mae and Freddie Mac, and jumbo loans, which are funded by private
investors for loan amounts higher than the limits set by the GSE's.
Conforming loans are funded by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These
companies do not lend money directly to you, but work with lenders across the
country to offer mortgage loans to meet your needs. As a secondary market for
mortgage loans, they purchase mortgages from lenders and package them into securities
that can be sold to investors.
If you are looking for a large loan amount to purchase or refinance
your home, you could consider a jumbo loan, which has a higher loan amount limit
than the limits set by Fannie Mae and Freddie Mac. Because jumbo loans cannot
be funded by these two agencies, they usually carry a higher interest rate.
The federal government and other state, local and private entities have developed
programs to help you purchase a home with a low down payment. If you are a first
time homebuyer or have low to moderate income, you may be eligible for a mortgage
insured by the Department of Housing and Urban Development (HUD) through the
Federal Housing Administration (FHA). While FHA does not make or buy loans,
they insure FHA loans so that if you default on the loan, the lender will get
reimbursed. You may be able to get an FHA loan with a low down payment of only
3% of the loan amount or less. While there are limits to the size of FHA loans,
they are generous enough to handle moderately priced homes almost anywhere in
If you are a veteran or qualify by military service or other entitlements, FHA
insurance can also be combined with a guarantee from the Veteran's Administration.
were created to help veterans achieve the American dream and buy their own homes.
VA loans offer low to no down payments with many of the same benefits as an
If you have bad credit, you may not qualify for a conventional loan. In this
case, you could consider a subprime loan. Like other loans, subprime loans come
in many forms based on the terms, loan amount and loan to value ratio you are
looking for. In addition companies will look at your credit and give you a credit
grade, which will help them determine the best loan for your situation. With
less than perfect credit, you can expect to pay higher interest rates because
of the higher risk associated with making a loan to someone with a poor credit