Like many American homeowners, your first mortgage may have been a loan with the Federal Housing Administration (FHA). Loans backed by the FHA are attractive to first-time homebuyers because FHA loans make it easier to obtain financing, requiring only minimal down payments and fair-to-good credit scores.
During the home buying process, you’re likely to be introduced to a wide variety of mortgage types. While it might seem logical to select a mortgage based upon what your friends or family have chosen, it’s more important to weigh whether or not a mortgage plan fits you and your individual lifestyle.
- Posted by Kristin Demshki
- loan types
A conventional loan is a type of mortgage that is not part of a specific government program, such as Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans’ Affairs (VA) loan programs. However, conventional loans are commonly interchangeable with “conforming loans”, since they are required to conform to Fannie Mae and Freddie Mac’s underwriting requirements and loan limits.
Conventional. Conforming. Non-conforming. Do you know the difference?
When you’re evaluating home loan categories, it’s easy to get confused by the terms “conventional” and “conforming.” As similar as these two terms may sound, their definitions are worlds apart, so it’s important to understand the distinctions. We’re here to clear the air.
Getting a mortgage might be harder for self-employed people, but borrowers around the country do it every day. The self-employed borrower needs not only to provide tax returns but to confirm them with Form 4506-T. This makes the process of qualifying for a mortgage loan run up against the usual strategy of minimizing income for tax purposes. With planning, though, you can live the American dream of owning a house and being your own boss.