Cell: (443) 205-9455   |   Office: (443) 978-3330   |

REALTOR® and Listing Agent with The Maryland & Delaware Group Of Long & Foster Real Estate Brandon Brittingham’s Team

Cell: (443) 205-9455  |  Office: (443) 978-3330
andrew.mcconnell@longandfoster.com

Andy McConnell
Andy McConnell
FAQ2022-02-20T22:03:55+00:00

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FAQ

Common Types of Mortgages

INTENDED FOR INFORMATIONAL PURPOSES ONLY:
The materials on this page are for informational purposes only and not to be interpreted as legal or financial advice.

Conventional Loan2022-02-17T04:06:34+00:00

A conventional mortgage loan is one that’s not guaranteed or insured by the federal government. Most conventional mortgage loans, aka conventional mortgages, are “conforming,” which simply means that they meet the requirements to be sold to Fannie Mae or Freddie Mac.

Fannie Mae and Freddie Mac are government-sponsored enterprises that purchase mortgages from lenders and sell them to investors. This frees up lenders’ funds so they can get more qualified buyers into homes.

Cash2022-02-17T04:08:10+00:00

With a cash-out refinance, you’re getting a new home loan for more than you currently owe on your house. The difference between that new mortgage amount and the balance on your previous mortgage goes to you at closing in cash, which you can spend on home improvements, debt consolidation or other financial needs. However, you’ll now be repaying a larger loan with different terms, so it’s important to weigh the pros and cons before committing to a cash-out refi.

Jumbo Loan2022-02-17T04:04:28+00:00

A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $647,200 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.

Also called non-conforming conventional mortgages, jumbo loans are considered riskier for lenders because these loans can’t be guaranteed by Fannie Mae and Freddie Mac, meaning the lender is not protected from losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or an adjustable rate, and they come with a variety of terms.

Veterans Administration (VA)2022-02-17T04:00:53+00:00

If you currently serve in the military or are a veteran, you’re potentially eligible for a VA loan.

A VA loan is a type of government loan, backed by the Department of Veterans Affairs (VA).

The VA offers specific guarantees to private lenders that handle VA loans. Because of these guarantees, lenders will issue loans to candidates with no down payment or less stringent requirements than other loans.

Federal Housing Administration (FHA)2022-02-17T03:50:52+00:00

An FHA loan is a mortgage insured by the Federal Housing Administration. Allowing down payments as low as 3.5% with a 580 FICO, FHA loans are helpful for buyers with limited savings or lower credit scores.

USDA (Rural Housing)2022-02-17T04:02:57+00:00

A USDA home loan is a zero down payment mortgage for eligible rural homebuyers.

USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture.

FHA 203K2022-02-17T03:54:01+00:00

An FHA 203k loan (sometimes called a Rehab Loan or FHA Construction Loan) allows you to finance two major items: the house itself, plus needed repairs and modernizations.

This loan addresses a common problem when buying a fixer home: Lenders often won’t approve loans for homes in need of major repairs. Because the lender tracks and verifies repairs when using a 203k loan, it is willing to approve a loan on a home it wouldn’t otherwise consider.

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