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Select The Type of Mortgage That Fits Your Needs
Buying a house is a significant financial decision, and getting a mortgage is integral to the process. In 2023, different loan programs are available, each with its own benefits and requirements. Here's an overview of the different types of mortgage loans and programs available.
Conforming Loans: These loans conform to the guidelines set by Freddie Mac and Fannie Mae, which are government-sponsored entities. In 2023, the maximum loan limit for conforming loans is $726,200 (base loan limit) for a single-family home. Some high-cost counties allow loan limits as high as $1,089,300 (high balance loan limit) for 1-unit properties. The minimum down payment requirement for a base loan limit is only 3% for first-time home buyers, and for high-balance loans, you can get a loan for as low as 5%.
FHA Loans: These loans are insured by the Federal Housing Administration and are designed for borrowers who may have a lower credit score or a smaller down payment. In 2023, the maximum loan limit for FHA loans is $472,030 (base loan limit) for a 1-unit property. Some high-cost counties allow loan limits as high as $1,089,300 for 1-unit properties. The minimum down payment requirement for an FHA loan is only 3.5% A recent reduction in FHA’s mortgage insurance premium has made this loan program cheaper for 2023 homebuyers.
VA Loans: These loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans and active-duty service members. VA loans often offer more favorable terms than conventional loans, including no down payment requirement and no private mortgage insurance (PMI) requirement. There is a funding fee (unless you are exempt) which can be added to the loan amount. These loans do not have any maximum loan limits as long as you can qualify. InstaMortgage recently closed a $3M VA loan with a 0% down payment. VA also reduced its funding fee for borrowers buying homes in 2023 putting more than a 5% down payment.
Jumbo Loans: These loans exceed the conforming loan limits set by Freddie Mac and Fannie Mae. Jumbo loans often require a higher down payment and stricter credit requirements than conforming loans. They also require significant reserves, the amount of assets you should have in your bank (or brokerage) account even after paying for the down payment and closing costs.
Now let's talk about different types of mortgage loans available for homebuyers in 2023.
30-Year Fixed-Rate Mortgage: This is the most common type of mortgage loan. The interest rate and monthly payments remain the same over the 30-year loan term, which can provide stability and predictability for homeowners. However, the interest rate for a 30-year fixed-rate mortgage is usually higher than for shorter-term loans.
15-Year Fixed-Rate Mortgage: This type of mortgage loan has a shorter loan term of 15 years, which means the borrower will pay off the loan faster and pay less interest over the life of the loan. The interest rate for a 15-year fixed-rate mortgage is usually lower than for a 30-year fixed-rate mortgage, but the monthly payments will be higher.
Adjustable-Rate Mortgage (ARM): This type of mortgage loan has an interest rate that can change over time, usually after an initial fixed-rate period. The interest rate can go up or down based on market conditions. ARMs can be a good choice for borrowers who expect to move or refinance before the interest rate adjusts.
Getting a Mortgage with a Work Visa or EAD in 2023: Most loan programs mentioned above are also available to borrowers with work visas like H1B, L1A, L1B, O, or TN visas. Borrowers with several different categories of Employment Authorization Document (EAD) are also eligible. However, you need to work with loan officers and lenders who are well-versed in such visa types to help you choose the right program that you will qualify for. At InstaMortgage, we have helped hundreds of non-permanent residents qualify for mortgage loans, some even with less than 2 years of US work and credit history.
In conclusion, many different mortgage loan programs and types are available in 2023, each with its own benefits and requirements. It's important to do your research and compare different loan options to find the one that best fits your financial situation and goals. At Instamortgage, with our competitive rates, digital-first approach, and legendary service, we can help you navigate the process and find the right loan for you.