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- You may qualify for an FHA loan with a down payment as low as 3.5%, even if your credit is less than perfect. These loans are typically easier to qualify for than conventional loans because they’re insured by the Federal Housing Administration. But even though they’re backed by the government, you still need to shop around for the best mortgage because FHA loans are issued by private lenders with different requirements and terms.
- A jumbo loan, or jumbo mortgage, is a home loan for an amount that exceeds the “conforming loan limit” set on mortgages eligible for purchase by Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that ultimately buy and administer most single-family-home mortgages in the U.S.
- The 2021 loan limit on conforming loans is $548,250 in most areas and $822,375 in high-cost areas.
- A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment or line of credit. Unlike a forward mortgage—the type used to buy a home—a reverse mortgage doesn’t require the homeowner to make any loan payments.
- A VA loan is a mortgage loan available through a program established by the United States Department of Veterans Affairs (previously the Veterans Administration). The VA sets the qualifying standards, dictates the terms of the mortgages offered and guarantees a portion of the loan, but doesn’t actually offer the financing. VA home loans are provided by private lenders, such as banks and mortgage companies, instead.
- A nonqualified mortgage (nonQM loan) doesn’t conform to the consumer protection provisions of the Dodd-Frank Act. Applicants whose incomes vary from month to month or those with other unique circumstances may qualify for these types of mortgages.For example, if you have a DTI of more than 43%, a lender may not offer you a qualified mortgage. Or, if you have erratic income and don’t meet the income verification requirements set out in Dodd-Frank and required of most lenders, you may not be offered a qualified mortgage.