Mortgage Loan Options

Mortgage Loan Options

Conventional - A conventional mortgage is not associated with FHA or VA loans. They are called Conventional Loans because they adhere to conventional standards within legal limits by mutual consent of the lender and borrower. It's an option that generally requires at least 5% down payment on the loan amount, but can be as low as 3% for some buyers. With a 20% down payment, private mortgage insurance (PMI) is no longer required. 


FHA Loans - Despite what many people think, the Federal Housing Admin (FHA) does not actually issue mortgage loans. It provides mortgage insurance, which protects the lender. Customers like FHA loans because they have more liberal qualification requirements. 


In addition, they typically have a lower down payment requirement (as low as 3.5%), lower monthly insurance premiums and often have lover closing cost. This makes FHA loans a very attractive loan for first-time home buyers and also for families with low to moderate income levels. 


USDA Rural Development - Under the Guaranteed Loan Program, Rural Development guarantees loans made by private sector lenders. (A loan guaranteed through RD means that, should the individual borrower default on the loan, RD will pay the private financier for the loan.) The individual works with the private lender and makes his or her payments to that lender. 


Under the terms of the program, an individual or family may barrow up to 102% of the appraised value of the home, which eliminates the need for a down payment. Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from RD makes the reality of owning a home available to a much larger percentage of Americans. 


VA Loans - Similar to FHA loans, VA loans are are guaranteed by the U.S. Department of Veteran Affairs and lenders make the loans to eligible veterans for the purchase, construction, or energy-saving improvement (approved by the lender and VA) of a home. VA loans share similar eligibility requirements as FHA loans, often with lower closing cost, and more liberal terms (usually without requiring a down payment) and even negotiable interest rates. If you qualify, the VA will issue a certificate of eligibility that you can provide a lender when making application for your loan. 


Renovation Mortgage Loans - A renovation mortgage allows the borrower to purchase a property and include renovations directly in the mortgage loan. This means you get to pay for the remodeling you need or want, amortized right into the mortgage. That's a lower interest rate than your typical credit card, and a better term than your usual home equity loan. 


    HomeStyle Renovation - The HomeStyle Renovation mortgage enables a borrower to obtain a purchase transaction mortgage or a limited 

    cash-out refinance mortgage and receive funds to cover the cost of repairs, remodeling, renovations,or energy efficient improvements to     the property. 


    There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. Repairs or     improvements, however, must be permanently affixed to real property and add value to the property. 


    FHA 203K - One of the most popular and diverse home improvement loans is the FHA 203k. You can make home improvements to the house you     want, or the home you already own. Use the funds for simple upgrades to your home like a kitchen or bath improvement, or to completely     reconstruct a home that id presently unlivable. You can even use a 203k rehabilitation Loan to tear down an existing structure and build a     new one using some portion of the existing foundation. You can barrow up to 96.5% of the appraised value - based on the value when the     improvements or repairs are completed.  



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Phone: 616-482-9332
Dated: May 31st 2016
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Pangburn Properties, Inc.
28 South Maple Street, P.O. Box 8
Grant, MI
231-674-5462
231-834-9199