CONVENTIONAL LOANS
Conventional loans are available through Flex Funding, a top reviewed mortgage broker based in Orange County, California. Conventional loans are those backed by Fannie Mae or Freddie Mac (known as Government Sponsored Entities or GSEs) and are not backed by the federal government.
Conventional loans are often best suited for homebuyers seeking a purchase loan with the fixed-rate mortgage loan for 10-30 years or are also often a great option for homeowners looking to refinance their current mortgage into a lower interest rate or cash out some equity.
WHAT IS A CONVENTIONAL LOAN?
A conventional loan is a type of mortgage loan that adheres to guidelines provided by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are known as Government Sponsored Entities (GSEs). Conventional loans are also referred to as “conforming loans” because they conform to the guidelines laid out by Fannie Mae and Freddie Mac. They are sponsored by the Government, in the fact that they are agencies which have been instrumental in standardizing the mortgage lending process. Most home loans are conventional loans, accounting for more than half of all mortgage loans, according to the Census Bureau.
Conventional mortgage loan products offer benefits to borrowers, including the option to choose a fixed-rate mortgage with terms ranging from as little as eight years up to 30 years or an adjustable-rate mortgage (ARM). That means you can pay your home off as quickly as you are financially able and/or want to pay it off.
ARM loans appeal to those individuals who don’t plan to stay in their homes for a long time. ARM loans are technically fixed-rate loans in the beginning, with fixed rates available for three years, five years, or seven years before they adjust. ARM loans often come with lower interest rates, making your monthly payment much lower than on a 30-year fixed mortgage, for example.
FAQ
Conventional loans are suited for homeowners or home buyers with a broad range of credit backgrounds from less than perfect to better pricing for stellar credit history and high scores. When you are applying for a mortgage loan through Flex Funding, our team of skilled mortgage professionals will provide you with various options so you can determine the best loan for you.
Some conventional loans may only require 3% for your down payment. 20% down is not necessarily required. Talk with a top mortgage broker to learn more about the minimum down payment that will be required for a conventional loan.
As a top-rated Orange County mortgage broker, Flex Funding is headquartered in Huntington Beach, California. To learn more about conventional mortgages, contact us online or call (714) 372-2213.
FHA LOANS
Flex Funding’s team of skilled mortgage professionals specialize in helping homeowners and homebuyers to obtain FHA loans. FHA loans are also known as government loans because they are those that are issued by federally qualified lenders and are insured by the U.S. Federal Housing Authority.
For many first-time home buyers and current homeowners, an FHA loan is the perfect purchase loan or provides the best opportunity to refinance your current mortgage into a better interest rate.
WHAT IS AN FHA LOAN?
FHA loans are government-backed loans, insured by the Federal Housing Administration (FHA). FHA loans are only available through FHA approved lenders, like Flex Funding. These mortgage loans are particularly popular with first time home buyers, as the requirements for loan approval are not as strict as other types of loans and are often great loans those individuals who have less than perfect credit and/or don’t have a large down payment.
Our mortgage professionals at Flex Funding are happy to talk with you about the benefits of an FHA loan.
WHAT ARE FHA LOAN REQUIREMENTS?
FHA basic loan requirements include the following:
FHA loans can be perfect for borrowers who do not have a large down payment, offering as little as 3.5%, all of which can come from a family gift, or a down payment assistance program, or a government grant.
Every borrower is evaluated for their ability to repay their loan. So, your credit score alone isn’t the only criteria used by lenders to determine if they will approve you for a loan. However, some minimum credit requirements do need to be met to qualify for an FHA loan. The minimum credit score for an FHA loan is 500, with 10% down. To secure the lowest down payment of 3.5%, credit scores need to be at least 580.
The FHA loan limits are specific to your region. Contact our qualified team of mortgage brokers at Flex Funding online or by calling (714) 372-2213.
VA LOANS
Flex Funding is proud to offer VA loans to our US Veteran clients for home purchases, accessing equity, or even streamlined refinances used to lower the rate. As a VA-approved lender, our team of mortgage professionals is honored to help active-duty military members, military veterans, and military reservists. VA loans are also outstanding mortgage loans for spouses of military members.
WHAT QUALIFIES YOU FOR A VA LOAN?
To qualify for a VA loan, you must meet one of the following criteria:
WHAT ARE VA LOAN BENEFITS?
The most notable is the 100% financing option that may be available. Qualified veterans, active duty service members, reservists, and spouses may not need a down payment to purchase a home with a VA loan. Also, VA loans often limit the number of closing costs for buyers, and there are no prepayment penalties for paying off your loan early. VA loans often have some of the best interest rates, and they do not require private mortgage insurance.
If you want more information about getting a VA loan Flex Funding is thrilled to help. Contact our professional mortgage brokers today by calling (714) 372-2213 or send us a message here.
JUMBO LOANS
Jumbo loans are real estate financing loans that exceed the conventional/conforming loan limits set by Fannie Mae and Freddie Mac and do not conform to the lending guidelines set by. Jumbo loans typically have higher interest rates than a conventional or conforming loan and will almost always require a larger down payment and significant proof of reserves. Flex Funding’s team of mortgage brokers has decades of experience in helping borrowers obtain Jumbo loans at the best rates available for their dream home.
WHAT ARE REQUIREMENTS FOR JUMBO LOANS?
Lenders tend to have varying requirements, but generally speaking, jumbo loans will require 10-20% as a down payment and decent credit scores (about 680 min) and a debt to ratio limit of 50% or less. Jumbo loans are typically available up to $2 Million, but some lenders may approve up to $3 Million. Besides, mortgage insurance will be required on loan to value (LTV) above 85%. Note, there are exceptions, and these requirements are not set in stone. Talking to an experienced mortgage broker will give you more insight into the requirements for your specific needs, based on your specific financial
Contact our experienced team of mortgage professionals at Flex Funding to learn more about jumbo mortgage loans in California.
We can be reached online or by calling (714) 317-7250.
NON-QM LOANS
What are non-QM loans versus qualified mortgages?
Qualified Mortgages are government and conventional loans. Non-QM loans are portfolio loans that do not conform to government and/or conventional mortgage guidelines. Non-QM mortgage rates are higher than traditional loans. A 10% to 20% down payment is required. There are no maximum loan limit caps on Non-QM Loans.
Characteristics of Today’s Non-Qualified Mortgages
The Consumer Financial Protection Bureau (CFPB) issued regulations to provide safer and more sustainable home loans for consumers, known as Qualified Mortgages (QMs). The Dodd-Frank Wall Street Reform and Consumer Protection Act imposed an obligation on lenders to make a good-faith effort to determine that the applicants can repay the mortgage. It is known as the ability-to-repay (ATR) rule. The Act also mandates that QM loans cannot have risky loan features like negative amortization, interest-only, balloon payments, terms beyond 30 years, or excessive points and fees. QM loans must also satisfy at least one of the following three criteria:
- Borrower’s debt-to-income (DTI) ratio is 43 percent or less
- The loan is eligible for purchase, guarantee, or insurance through the Federal Housing Administration, Veterans Affairs, United States Department of Agriculture, or a government-sponsored enterprise (GSE), regardless of the DTI ratio
- The loan was originated by insured depositories with total assets less than $10 billion and must be held in portfolio for at least three years.
Any home loan that doesn’t comply with the QM rules is called non-QM. A non-QM loan is not necessarily a high-risk loan. It’s merely a loan that doesn’t meet the QM standards. Examples of a non-QM loan include interest-only or limited/alternative documentation loans. A non-QM loan still needs to satisfy the ATR requirements.
Creditworthy borrowers not applying for GSE or government-insured loans may benefit from non-QM options. These may include self-employed borrowers, first-time homebuyers, borrowers with substantial assets but limited income, jumbo loan borrowers, and investors.
Types of Non-QM Loans
NON-US CITIZEN PROGRAMS
ASSET DEPLETION Borrower assets are used to help in DTI qualification (if assets are enough to qualify, tax returns are not required). Assets do not need to be withdrawn or pledged to use the income (only two months of bank statements are required). Self-employed and W2 borrowers are okay. It can be combined with Full Doc income. Can be combined with Bank Statement income if assets are from an account not being used for bank statement calculation, No age limitations.
The following assets are considered eligible and can be utilized to calculate income:100% of checking, savings, money market accounts, and cd’s, 100% of the value of stocks (must be fully vested) & bonds, 100% of retirement assets (if the borrower is not of retirement age reduced to 60%). If you are unsure about a particular asset, email us.
DSCR (RENTS TO QUALIFY) Our Investor Cash Flow mortgage program allows your clients to qualify based on rental analysis to determine property cash flow. No personal income is required to qualify. This saves you from submitting complicated income statements and tax returns.
DSCR as low as 1.00%, Arms (Interest only available) and Fixed Products Offered, LTV’s up to 75%, Loan amounts $200,000 to $1,500,000, SFR, Condo’s, 1-4 units, 680 minimum credit score, Vesting in Corporations & LLC’s allowed, Unlimited financed properties.