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Any loan that is not government insured is considered a conventional loan. FNMA, FHLMC & Subprime lenders offer conventional loan programs with loan to values as high as 100% and on occasion even exceeding 100%. In the event the borrower invests less than a 20% downpayment these conventional loans require private mortgage insurance. PMI companies are separate from lenders and premiums are based on levels of risk such as LTV and credit score. PMI (private mortgage insurance) coverage is vital to the lenders in the event the borrower defaults on the loan. Some borrowers may be eligible for mortgage loan programs that require less than 20% downpayment with no mortgage insurance. We accomplish this with combo loans with a first and second mortgage or with lender funded mortgage insurance. They have slightly higher rates but eliminate the mortgage insurance requirement. Call ProMax Mortgage Services, Inc. today to learn more about our various loan programs.
Government insured loans are available with government backed mortgage insurance. FHA (Federal Housing Administration) loans offer homebuyers an opportunity to purchase a home with less money "out of pocket" and more liberal underwriting criteria. Traditionally, FHA loans cater to first time homebuyers, however, with the increased loan limits, homebuyers of all levels could consider an FHA loan. FHA loans require the presence of mortgage insurance called "M.I.P." for mortgage insurance premium. Typically, MIP is charged as percentage of the loan amount, which is financed into the loan and as part of the monthly payment called monthly mortgage insurance. Unlike conventional loans, all FHA loans require MIP regardless of the loan to value. The other government loan is the VA loan. VA (Veterans Administration) loans are available veterans who have established entitlement. The VA loans do not require a downpayment and require a funding fee in most cases. The funding fee ranges from 2% to 3% of the loan amount.
All cases are different and require an experienced loan officer to help you work through all the available options.
Call ProMax Mortgage Services, Inc. today at (407) 647-3377.
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