What Type Of Loan Or Mortgage Do You Qualify For?

It's simple really, your loan qualifies for one of four basic types:

Conventional (Conforming) Loan - By far the most common type of loan is a conventional or conforming loan. This simply means that your loan conforms to Fannie Mae or Freddie Mac guidelines (Good Credit, Low Loan to Value, and Loan Amount under the limits), and generally speaking:

• Total Loan Amount Is Less Than*:
  • One-family loans: $417,000
  • Two-family loans: $533,850
  • Three-family loans: $645,300
  • Four-family loans: $801,950
• Debt To Income Ratio (DTI):
  • NON-MORTGAGE debt payments are less than 28% of your gross income
  • TOTAL (including mortgage) debt payments are less than 36% of your gross income
• FICO^® Score Minimums (about your FICO^® score):
  • 700 for a loan to value higher than 80% (LTV is the amount of debt on the property divided by the value of the property)
  • 660 for a loan to value less than 80%

*Note: One- to four- family mortgages in Alaska, Hawaii, Guam, and the U.S. Virgin Islands are 50 percent higher than the limits for the rest of the country.

FHA Loan - A loan program coordinated by the Federal Housing Administration and issued by an approved lender (Low Down Payments, Low Closing Costs, Easy Credit Qualifying):

• FHA Loan Limits:
  • These vary by State and County, generally $271,050 to $729,750. Click here for the FHA Loan Limit Calculator
• Debt To Income Ratio (DTI):
  • NON-MORTGAGE debt payments are less than 31% of your gross income
  • TOTAL (including mortgage) debt payments are less than 43% of your gross income
• Credit Score & Report:
  • FHA eligibility isn't determined so much on your credit score, but rather your overall credit profile.

VA Loan - A loan program coordinated by the US Department of Veteran's Affairs and issued by an approved lender (Similar to an FHA loan, Low Down Payment, Low Closing Costs, Easy Credit Qualifying):

• Military Service:
  • Must be a Active Military, Military Veteran or Surviving Spouse
• Total Loan Amount:
  • $417,000 up to $625,500 in certain areas
• Debt To Income Ratio (DTI)
  • Your NON-MORTGAGE debt payments are less than 41% of your gross income
  • Your TOTAL (including mortgage) debt payments are less than 41% of your gross income
• Credit Score & Report:
  • VA eligibility isn't determined so much on your credit score, but rather your overall credit profile.

Non-Conventional (Non-Conforming or "Jumbo Mortgage") Loan - If you don't qualify for a conventional or conforming loan, and don't have access to the government coordinated FHA and VA loan programs, your loan qualification is by default a "Non-Conforming" or "Non-Conventional" loan program.