LOAN
PROGRAMS
Conventional Loan:
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Conventional loans are actually any type of creditor agreement that are not guaranteed by the Veterans Administration (VA), or insured by the Federal Housing Administration (FHA).
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In general, all conventional loans are eligible for sale to the government sponsored entities such as Fannie Mae (FNMA) and Freddie Mac (FHLMC) or to private secondary market investors.
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There are two different types of Conventional loans; Conforming and Non-Conforming loans. Conforming loans have to meet the guidelines set by Fannie Mae and Freddie Mac. Any loan which does not meet guidelines is a non-conforming loan.
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Jumbo Loan:
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A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $766,550 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.
Also called non-conforming conventional mortgages, jumbo loans are considered riskier for lenders because these loans can't be guaranteed by Fannie and Freddie, meaning the lender is not protected from losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or an adjustable rate, and they come with a variety of terms.
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Advantages:
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VA Loan:
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VA loan is a mortgage loan guaranteed by the Veterans Administration. It was created in 1944 and signed into law by President Franklin D. Roosevelt. A VA loan provides veterans and/or their surviving spouses who have not remarried, with a federally guaranteed home with zero down payment. The program, also referred to as the GI Bill, has been highly successful and has helped millions of American veterans and their families acquire a home.
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Advantages:
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No down payment
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VA does not require private MIP
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Limit on the amount of origination fees and closing costs that the lender can charge
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Limit also placed on appraisal fees
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Features:
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Borrower with eligibility remaining must have a Certificate of Eligibility from the VA
Borrowers are required to make a one-time funding fee based on loan amount and applicant’s service length.
Closing costs can be paid by the lender and the seller.
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FHA Loan:
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The Federal Housing Administration was created in 1934 in an effort to bolster homes sales during the Depression. By financially guaranteeing loans, the FHA lifts much of the risk of non-payment and foreclosure from private lenders. It is important to remember that the FHA is not a lender; they just guarantee your loan.
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Advantages:
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Bankruptcy not an automatic disqualification
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Lower interest rates
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Down payment is less
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Lower mortgage points and other closing cost requirements
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Resale can be made more quickly
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Is backed by the U.S. government
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Features:
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Down payment required
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Higher upfront Mortgage Insurance Premium (MIP) than on conventional loans but monthly MIP is lower
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Loan Limits are lower than conventional
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MIP required regardless of the Loan-to-Value (LTV)
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FHA 3.5% Down Payment
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Lower Credit scores permitted (as low as 500)
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Down Payment can be a gift from a family member
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Minimum 2 years from Bankruptcy
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Minimum 3 years from Foreclosure
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Max 6% Seller Assist
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Rate Term Refinance:
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The process of paying off one loan with the proceeds from a new loan, using the same property as security. Cash received by the borrower at closing may not exceed $2,000 (not allowed in Texas). Status varies depending upon State Law. The purpose is, as the name implies, to reduce the interest rate, payment, and/or overall term of the mortgage.
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Advantages:
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Reduction of the interest rate, payment, and/or overall term of the mortgage
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Limit of $2,000 cash (varies depending upon State Law)
First Time Homebuyers:
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Freddie Mac Home Possible® and Home Possible® offers a fixed-rate loan program and provides a responsible, low down-payment mortgage option for first-time homebuyers and low-to-moderate income borrowers.
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FHLMC Home Possible® – Max LTV 97%
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15 & 30 Year Terms Available
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Lender Paid Mortgage Insurance Available
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Owner-Occupied Primary Residence Only
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1-4 Unit SFR’s, PUD’s and Condo’s
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Max 50% Debt-To-Income
LOAN
PROCESS
The Schmidt Team offers mortgage services for California consumers, as well as other states. Our branch prides its self on delivering a world-class customer experience, while offering a wide variety of mortgage programs at a competitive interest rate.
LOAN APPLICATION:
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Our Loan Officer meets with applicants in person, via phone, or online.
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Order credit report, pre-qualify, and send required disclosures.
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Customize loan products to meet individual needs.
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Maintain communication throughout the loan process
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LOAN SET UP:
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Send required disclosures to client.
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Order residential appraisal.
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Send verification to applicable entities.
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LOAN PROCESSING:
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The processor is your contact during all processing and compiling of information for loan submission.
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Email all information for loan processing to your processor.
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UNDERWRITING:
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Evaluation of credit and property in determining adherence to lending guidelines.
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CLOSING:
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The Schmidt Team prepares Closing Disclosure then provides final closing figures.
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Loan Officer will send prepared Closing Disclosure for borrower signature 3 days prior to closing.
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The Schmidt Team sends prepared docs to the title company.
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POST CLOSING:
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Please feel free to call us for any assistance you may need after closing.
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Thank you for the opportunity to serve your mortgage needs.
