Mortgages

Finding the mortgage that is right for you.

There are many types of home mortgages on the market. Choosing the best one can be tricky. First Financial Freedom Mortgage (FFFM) is here to take some of the guesswork out of determining which mortgage is right for you.

Conventional Mortgages
A conventional mortgage, unlike an FHA loan, is not backed by the federal government. Guidelines are set by Fannie Mae and Freddie Mac. Consequently, it will usually require a higher credit score from the applicant. In many cases, a conventional mortgage will require a bigger down payment. (Typically 5% or higher depending on the borrower’s credit score.) Private Mortgage Insurance (PMI) is required on loans that have a loan to value over 80%. A conventional loan will also require that the borrower carry less overall debt. Conventional mortgages come in many varieties: adjustable rate, fixed, balloon loans and hybrid loans. Fannie Mae and Freddie Mac have established programs for existing loans that are owned by them that will allow the borrowers to refinance into a better situation even though they might have issues with LTV or credit. If you are not sure if your home loan is owned by Fannie or Freddie, then give us a call and we can assist you in making this determination.

FHA Mortgages
These days, an FHA home loan is one of the most popular ways to become a homeowner or refinance an existing FHA or conventional mortgage. Although there are similarities between FHA mortgage financing and conventional mortgage loans, there are also some big differences. For instance, while interest rates are similar, credit guidelines are different. FHA allows for borrowers with less-than-perfect credit to still receive a favorable interest rate. FHA loans offer:
• Only 3.5% down payment
• Low credit scores
• Low assets
• Streamline refinancing

VA Mortgages
If you are a veteran, a VA mortgage may be a very good option. The VA Home Loan program allows veterans with qualifying income and credit to purchase a primary residence with no money down, as long as the sale price does not exceed the appraised value of the home. VA does charge a Funding Fee of up to 3.3%. VA loans offer:
• 100% financing
• No monthly mortgage insurance
• Up to 4% seller paid closing cost
• Streamline interest rate reduction loan program
• Low credit scores

USDA Mortgages
These home loans are offered in rural areas under the auspices of the United States Department of Agriculture (USDA). The USDA’s mission is to help lower-income households obtain home loans at reasonable mortgage rates. USDA home loans offer:
• 100% financing
• No monthly mortgage insurance
• No asset or automatic reserve requirements
• Low credit scores
• Gifts allowed for closing costs
• Required property improvements can be financed into the loan up to 102% of the "improved" value. (USDA will also allow repairs to be completed after closing.)
• Up to 6% seller paid closing cost

Although a mortgage insurance premium is not required, USDA does charge a 2% funding fee to guarantee the mortgage. This fee may be financed into the loan amount.

Jumbo Mortgages
To refinance or purchase a home that exceeds the Fannie Mae, Freddie Mac and Ginnie Mae guidelines, a jumbo mortgage could be an option. Jumbo loans are just what their name implies: a larger-than-average loan. The loan limits are determined by the loan type (FHA, VA, Conventional, etc.), property type and property location. In Texas, the conventional loan limit is $417,000 for a single family resident. FHA loan limits are determined by county.

To begin your home loan pre-qualification, simply contact a First Financial Freedom Mortgage Specialist at (866) 563-7021 or apply now with our easy online application.

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