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Mortgage Loan Programs
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in the Greater Metro Detroit Area
Mortgage Loan Programs
Jumbo Loans
People are taking advantage of the opportunity to get more out of their home loans.
This explains the growing popularity of what is called the jumbo loan or jumbo mortgage.
What is a Jumbo Loan?
A jumbo loan may only be available to those with exceptional credit. This is because a jumbo mortgage lets the borrower take a larger loan than what the ordinary loan conforming limits will allow. The standard is a framework adhered to by Fannie Mae and Freddie Mac, setting a limit on the standard maximum value of an individual home loan package, and the parameters of a jumbo loan exceed those standards.
Fannie Mae and Freddie Mac are US companies that are authorized by the government to back or guarantee the majority of mortgages taken out in the United States. In short, they are financial service providers who work closely with the federal government on home loans. They are the industry standard, and their job is to remain within the limits of that standard, which are described by the Federal Housing Agency.
A conventional mortgage is eligible to be guaranteed, purchased, or audited by Fannie Mae or Freddie Mac. A jumbo loan, on the other hand, is larger and has higher qualifying requirements. For that reason, when you enter into a jumbo loan agreement, you will be receiving a larger loan than you normally would, and the qualifications are higher than with normal loans.
How Does a Jumbo Loan Work?
The ordinary loan limit is $726,200. If you would like to buy a home that costs more that than you will need to qualify for a jumbo mortgage. The qualifications are more stringent, but if you do qualify, and you have the ability to manage it, a jumbo loan could be a fantastic option.
These types of loans are also known as non-conforming loans because they exceed the usual perimeters of ordinary loans. If you enter into an ordinary loan, it will be backed by the FHA, Fannie Mae, or Freddie Mac. Jumbo loans do not enjoy that level of security, which is why those who take them must meet stricter qualifying standards.
A jumbo loan is an agreement between you and your financial service provider. They are not protected by government sanctioned entities if the borrower defaults. Often, a jumbo loan will come with a fixed or adjustable interest rate.
How to Apply for a Jumbo Loan
To qualify, you will need a higher-than-average credit score. You will need to show a solid employment history and some savings on hand. Your debt-to-income ratio will be considered, and you'll need to make a down payment.
That done, you will gather the pertinent documents, contact your lender, and prequalify. Then, you simply wait for your application to be approved and close the deal on your new home.
Here at Direct Financial, we're in the business of helping young families and first-time homeowners get a foot in the door of the American Dream, securing beautiful homes in the Greater Metro Detroit area.
Our home financing professionals will work with you closely to make sure you receive the financial services you need to meet your budget and realize your goals. Get in touch today to learn more.
VA Loans
The housing market is a key part of the nation's economy, which is why the federal government assigns the job of stabilizing the housing market to Fannie Mae and Freddie Mac. It is also part of the reason why Veterans Assistance (VA) loans are designed to be a great option. Not only are they one of the most important ways to reward our military service members for their time, effort, and sacrifice, but they also provide valuable opportunities to people who deserve it.
At Direct Financial, we work with military veterans and currently enlistees across a range of service categories. In our experience, VA loans are one of the most important services our government provides. They give people with a proven work ethic, who may not have deep pockets, the opportunity to leverage their commitment to their country and to their communities to obtain affordable home loans for the Greater Metro Detroit area home.
What is a VA Loan
A VA loan is a home mortgage loan that is guaranteed by the US Department of Veterans Affairs to current and former military service members who qualify. The VA loan program is for veterans, persons who are currently enlisted, reserve members, and some of the surviving spouses of deceased, missing, and POW service members.
The purpose of the program is to offer affordable home loans to veterans with no down payment. The Dept. of Veterans Affairs does not originate these loans. Instead, they set rules which govern who does and who does not qualify. These rules also determine what financial institutions may and may not provide VA home loans.
This means it is important to work with a financial services provider who is qualified, experienced, and properly certified to originate VA loans. This helps to ensure that veterans receive a fair deal on their home mortgages. It also gives you plenty of recourse when things do not go according to plan.
How does VA Loan work?
The first step to securing a no down payment VA loan is to prove your military history. If you meet the definition of one or more of the qualifying categories and work with a qualified financial services provider, you will be accepted by the program.
You will not be expected to pay mortgage insurance as you would with most types of home loans. You will need to pay a VA funding fee which will be equal to .5% to 3.6% of your total loan. This is necessary to offset the cost of these loans. But don't worry, it is still very affordable, even on an enlisted person's income. You will be pleased to know that this offset fee helps other veterans like you to access affordable home ownership.
Your lender will be forbidden to charge you more than 1% interest on closing costs. This is just one of the ways the program makes your funding fee worth paying.
Finally, you will also benefit from the fact that VA loans are not subject to the same size limits that other federally secured loans are limited to. The usual upper limit for a federally secured home loan is $647,200. But for qualified VA loan recipients, the limit is determined only by your ability to pay.
Who Qualifies for VA Loan?
The qualifications are pretty forgiving. Most current or former members with at least 90 days of continuous service during war time or 181 days of continuous service during peace time will qualify. If you are in the Reserves or the National Guard, you will need six years or more.
If you have an Other Than Honorable (OTO) discharge, you may not automatically be disqualified. If you had an early separation, were discharged for medical reasons, or for force reduction reasons, there is a good chance you will still be able to qualify.
If you have any questions about your qualifications, our loan experts at Direct Financial will be happy to help.
How to Apply for a VA Loan
The first step to securing your VA loan is to obtain a Certificate of Eligibility, (COE). To apply for your COE, obtain a VA Form 26-1880 from the Veterans Affairs office, fill it out and turn it in. If you are qualified, they will issue your COE to you.
From there, simply go down to your local qualified financial services provider. They will lay out all of the available options, walk you through the process, and offer valuable advice on how to get the most out of your VA loan.
If you qualify for a VA loan, you have many valuable options available to you, options that could form the building blocks for a lifetime of financial security. To learn more about your options, and how Direct Financial can help you secure your Greater Metro Detroit area home, contact us today.
Second/
Seasonal Properties
Seasonal properties are single family residential properties occupied by the owner and are not the legal residence of the owner/borrower.
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Questions? We can explain the different loan types and help you decide which one works best for you. Give us a call today!
