A conventional conforming loan is a mortgage that meets the dollar limits set by the Federal Housing Finance Agency (FHFA) and the funding criteria of Freddie Mac and Fannie Mae. For borrowers with excellent credit, conforming loans are advantageous due to their low interest rates. These are non-government backed/insured loans.
The term fixed-rate mortgage refers to a home loan that has a fixed interest rate for the entire term of the loan.
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A hybrid adjustable-rate mortgage, or hybrid ARM (also known as a "fixed-period ARM"), blends characteristics of a fixed-rate mortgage with an adjustable-rate mortgage.
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A non-conforming loan is simply any mortgage that doesn't conform to the requirements set forth by Fannie Mae and Freddie Mac. Non-conforming loans commonly include jumbo loans (those above Fannie Mae and Freddie Mac limits) and government-backed loans like VA loans, FHA loans or USDA loans.
A jumbo loan, also known as a jumbo mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA).
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Government home loans are mortgages that are guaranteed or issued by a federal agency to help first-timers, rural residents, veterans and others buy, refinance or improve a home.
In 1934, the Federal Housing Administration (FHA) was established to improve housing standards and to provide an adequate home financing system with mortgage insurance. Now families that may have otherwise been excluded from the housing market could finally buy their dream home.
FHA does not make home loans, it insures a loan; should a homebuyer default, the lender is paid from the insurance fund.
FHA 203k loans are a type of mortgage financing that is specifically designed for homeowners who are looking to make improvements to their property. These loans, which are also known as rehabilitation loans or renovation loans, are provided by the Federal Housing Administration (FHA) and are insured by the government.
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FHA ARM loans come in two types: standard and hybrid. With a standard ARM loan, your interest rate adjusts at regular intervals based on changes in the market. A hybrid ARM is similar but adds an initial fixed-rate period before the later period when the ARM adjusts.
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Cal FHA, also known as the California Housing Finance Agency, is a state agency that provides a range of housing finance programs and services to residents of California. The agency, which was established in 1975, is the largest provider of mortgage financing in California and is a key source of funding for first-time homebuyers, low-income households, and other underserved populations.
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The Department of Veterans Affairs (VA) is a federal agency that provides a range of benefits and services to military veterans, including health care, education, and home loan benefits. The VA's home loan benefit, which is known as the VA Home Loan Program, is designed to help military veterans and their families buy, build, or improve a home.
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Alternative loans are designed to help atypical buyers secure financing.
Bank statement non-QM loans are a type of mortgage loan that is designed for self-employed borrowers who may not meet the traditional income and employment verification requirements of a conventional mortgage. These loans are based on the borrower's bank statements, rather than pay stubs or tax returns, which can make them a more flexible and accessible financing option for self-employed individuals.
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The gig economy, which refers to the growing trend of individuals working temporary or flexible jobs, has created new challenges and opportunities for the mortgage industry. Many gig economy workers do not have traditional forms of income, such as a salary or hourly wage, which can make it difficult for them to qualify for a conventional mortgage loan. However, there are now non-QM loan options specifically designed for gig economy workers.
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