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What defines Conventional



Conventional mortgages have high credit standards  and in recent years have become credit score driven. Please see our page on "Credit type in a nutshell"  for an explanation on credit


Scoring. These loans are generally reserved for borrowers with long term perfect credit
histories. In the case of purchase loans they require larger down payments and have more out
 of pocket costs. The advantages of conventional financing is faster approval and closing times


What are FHA home mortgage loans?

The primary advantage to FHA home financing is the less restrictive credit criteria. FHA will allow a
 borrower that has had a few slow pays or delinquencies to buy or refinance a home. There will need to
 be a reasonable explanation for these credit delinquencies. More common sense underwriting is used. Conventional underwriting on the other hand relies primarily on credit scoring and has much stricter
 credit requirements


What are VA loans?

The Department of Veterans Affairs offers to qualified members of the armed forces
mortgages up to 100% of the value of a home they may be purchasing. VA loans are made by
 private lenders and  have a VA lending fee that ranges from one half percent to five
percent of the mortgage. VA also offers rate reduction loans or streamline refinances that
require little or no documentation. There are a few other basic requirements for these loans that
 are standard to the loan industry, such as the home being in good repair. Additionally, VA offers
 cash out refinance loans up to 90% of the appraised value. Term of ownership,
appraised value and debt ratio can all affect the loan amount.

What is a Jumbo loan.

A loan that is over the maximum amount for Fannie Mae or Freddie Mac or exceeds the
conventional maximum loan amount limit is considered a Jumbo loan. The loan amount for a
 Jumbo loan can go up to three million dollars. Loan to values for Jumbo loans can range from a
high of 95% down to 60% and will depend on the loan amount. Jumbo loans are offered in
 both fixed and adjustable rate formats. Other guidelines such as debt ratio,
residence requirements and job requirements may apply.


Non - Conforming Products

Program Descriptions

Program descriptions can vary from lender to lender. The following content is provided
simply as an informational tool.  Following is a list of the most commonly used programs.


-1st and 2nd mortgages 

 -125% maximum loan to values  

-Debt ratios up to 60% of gross income 

 -Fixed and adjustable rate loans 

 -Purchase and refinance loans 

 -Owner and non-owner properties

  -Single and multi-family properties

-Rural, urban and suburban properties

  -No documentation and limited documentation loans

  -Full appraisal, drive by appraisal  and stated value loans

  -Minimum and maximum loan amounts vary by lender

  -Credit lines and revolving loans 

 -Balloon loans 

 Be sure you ask your lender specific questions before you apply or pay an application fee.

Commercial Loans

Commercial Loans are business loans or investment loans where the collateral
generally doesn't include personal property. These loans may be secured or
unsecured. Some loans may also require personal guarantees.


General Information

Never choose a lender without asking a few simple questions. Naturally we all ask about
 rate, payments and loan terms. Following are some additional items you should cover.


How long have you been in business?

Do you have more then one source for my loan?

How are the fees paid?

Are there any up front or out of pocket fees.

How long will it take to get my loan approved and closed?

There are no hard and fast rules when it comes to the answers to these questions. Your individual
 situation and time frame for closing and approval will affect what is, and what is not acceptable.
 Many times, higher fees are justified by better service. Even in the mortgage business, you can
 apply the adage, you get what you pay for. In any case, the fees should not vary greatly from loan
 to loan unless there is a buy down or you select a special option.

Contact one of our experienced loan officers for more information.


E-Mail info@approvedmortgagecenter.com


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