Government Loan Programs

Best known for low rates and increasingly flexible guidelines, conventional loans are one of the most popular mortgages in the contemporary market. If you are looking to buy a high-end house that is luxurious and grand, getting a conventional jumbo loan is your best choice.

What is a conventional loan?

Even though conventional loans are quite common, the availability of different loan types in the market can often make it a bit complicated to understand.  So, what exactly is a conventional loan? A conventional loan is a type of mortgage that is not insured or guaranteed by any government institution. These loans are handled by private lenders and are not backed for government entities like FHA, VA, or USDA.

What is a conventional jumbo loan?

Maryland has divided its conventional loans into two different types, conforming and non-conforming loans. A conventional conforming loan is one that meets the loan standards that has been set by Fannie Mae and Freddie Mac, agencies that standardize mortgage in the US real-estate market. A conventional non-conforming or jumbo loan are home loans that exceed the lending limits set by Fannie Mae and Freddie Mac. The conventional jumbo loans are how you buy expensive and luxurious properties in Maryland. The general conforming and FHA loan limit in the states of Maryland is below $679,650. If you want to buy a house that priced above this set limit, a conventional jumbo loan is what you will need.

Learn more about conventional jumbo loans and its advantages. 

What are the benefits of getting a conventional jumbo loan in Maryland?

Before we move forward to discuss the conventional jumbo loan requirements in Maryland, let’s talk all the benefits of getting a conventional jumbo loan.

• The conventional jumbo loan allows you to buy multiple properties without limiting your options. Whether you are looking to buy a secondary residence or a boarding house, the conventional jumbo loan gets various mortgage options for you.
• Most government-backed loans need you to pay an additional cost of insurance premium every month. This can substantially elevate your interest rate and cause financial problems. A conventional jumbo loan saves you from the trouble. You do not need to pay any monthly insurance premium and are saved from the elevated interest rate.
• Conventional jumbo loans do not require any pre-payment penalty. It simply means if you want to sell your home and repay the money, or just pay off your loan early, you are saved from penalties that most loans ask for.
• Conventional jumbo loan gives you a choice to decide your own interest rate. You can avail a fixed rate or go for adjustable rate term; the decision is yours.

Want to avail these benefits as soon as possible? Get yourself pre-approved today!

What are the conventional jumbo loan requirements in Maryland?

Here are the conventional jumbo loan requirements that you will need to fulfill to get approved in Maryland:

Down Payment– As conventional jumbo loans offer financial help for larger and pricier properties, the down payment is quite low compared to others. You only need to pay a down payment of 10 percent of the total property cost. This is extremely helpful for individuals living in higher cost states of Maryland. Most banking institutions and lenders ask for 20 percent down payment which can a lot if the total cost of the house in high. The 90 percent jumbo mortgage is the perfect way to tackle the problem. You can also avail a 95 percent jumbo mortgage where the borrower only needs to put up a down payment of 5 percent. It is generally applicable to borrowers looking to buy home with a price tag of around $1,500,000.

Loan to value guidelines– The conventional jumbo loan financing rates are different for different scenarios. Based on the loan to value ratio, one can get anywhere from 85%, 90 %, to 95 % financing on their primary residence. You can avail 85 % financing for a house priced up to $3,500,000, 90% financing up to $3,000,000, and 95% financing for total cost up to $1,400,000.

If you are looking to get your second house financed, the numbers change a little. You can avail 80% financing up to $2,000,000, 85% financing up to $1,500,000, and 90% financing up to $2,000,000.

Credit score– The credit score requirement is considerably high, mainly because conventional jumbo loans deal with larger and costlier homes. If you want 85% financing on your loan, you will be required to have a good credit score of 720 or more. Other financing rates including 90% and 95% require a credit score of 700 or more to be accepted. There are no changes in the credit score requirement despite the fact whether it is your primary residence or a secondary one.

Payment reserve– Based on the total amount of loan taken and the amount paid as the down payment, the borrower will need to have a minimum payment reserve to get approved. If the loan amount is above 1.5 million, you will need to have a 12 months payment reserve. All loans below the amount will require a 6 months payment reserve to get approved.

Income requirements– You will need to submit all income related documents for the past two years. This might include your payment stubs, tax returns, offer letter, and more. Since these loans are not backed by any government institutions, lenders do their own research to choose the most reliable and financially stable individuals. You need to be working for the same employer for the past two to three years. If your employment history is volatile and filled with regularly changing employers, you might not get approved. Make sure to keep your income history clean and stable to get approved.

Looking for ways to finally own your dream house? Get financed with the conventional jumbo loan and avail the plethora of benefits. Make sure you consult with a licensed loan expert to learn more about your options.

Know more and get your loan application approved now!

 

Maryland FHA Streamline Refinance

With the significant fall in interest rates in the recent times, borrowers in Maryland are anxiously searching for effective ways to lower their old interest rates. FHA Streamline Refinance is an effective and fast way to deal with the problem and take care of all your FHA backed loans. It gives you the opportunity to lower your interest rate, monthly payments, and gain freedom from a lot of paperwork. But before we discuss its advantages, let’s discuss what FHA streamline refinance actually is.

What is FHA Streamline Refinance?

FHA Streamline refinances allow Maryland homeowners to refinance their home loans according to the current interest rates. If the rate of interest in the market is lower than it was when you acquired the loan, you can refinance the loan to take advantage of current market conditions. It is an easy and effective way to reduce your interest rate and lower your monthly payments if you have an existing FHA home loan.

Best of all, you do not need to submit a new credit report, complete verification of your employment, or an appraisal, which saves you a lot of valuable time and money.

Why should you refinance through FHA streamline refinance in Maryland?

Refinancing can provide significant savings. Here is a checklist that would make refinancing a smart option for you:

• If your current loan has a high-interest rate.
• If your current loan offers adjustable rates.
• If your credit score has recently improved
• If you have a balloon payment coming due soon.
• If you are planning to stay in the same house for the coming years.
• If you have accumulated some equity
• If you have a HELOC (Home Equity Line of Credit)
• If you have a second mortgage to pay

If you are having any of the mentioned issues, you could benefit from refinancing your current home loan. Not only will you be able to enjoy the attractive FHA streamline refinance rates but also help you manage your long-term finances more efficiently.

The FHA streamline refinance is a reduced documentation loan, meaning it is much easier to obtain than your initial FHA loan.

What are the advantages of FHA streamline refinance in Maryland?

There are many FHA streamline refinance pros and cons to be discussed. Apart from refinancing your loan rates to meet the more attractive current market standards, FHA streamline refinance offers numerous other advantages.

• FHA streamline refinances program permits you to refinance up to 96.5 percent of your property’s total value. If you are someone who still owes the significant portion of your existing mortgage, this is the most effective and proficient solution for you.
• Having bankruptcy in your financial history might be the sole reason for rejection by other financial institutions. But FHA refinance program allows you get help despite your financial history. As long as your record is clean and without any bankruptcies for the past two to three years, you can get refinanced.
• Individuals who outright own their home are allowed to borrow up to 85 percent of the property’s total value without any hassles.
• The FHA streamline refinance lenders are quite lenient and keep the credit and income requirement rates to the minimum. You can even get an FHA refinance at the low credit score of 650.
• Foreclosure in your financial history is no issue either. As long as the foreclosure happened at least three years prior, you can get your home loan refinanced, easily and effortlessly.
• Apart from the possibility of “no-cost” refinancing, streamline refinance in FHA do not require any additional loan balance to cover the loan costs.

With the exponentially low market rates and such attractive advantages, more and more homeowners are getting their loans financed in Maryland. So, what are you waiting for? Apply for getting your home loan refinanced today!

How can you qualify for an FHA streamline refinance?

To qualify for your FHA streamline refinance, here are some necessary requirements that you will need to fulfill.

• To avail the benefits of the FHA refinance program in Maryland, you must currently have an FHA loan.
• Your mortgage needs to be insured to get qualified for refinancing.
• The particular home on which you have taken the loan or are planning to get refinanced needs to be your primary home. A second house or holiday home will not qualify.
• You need to have a clean mortgage repayment history. Your mortgage payment must be current to meet the requirements of the FHA streamline refinance program.
• The new loan you aspire to take should lower your interest payments and monthly principles compared to the old one. It needs to be a conversion from an adjustable rate to a fixed rate.
• The current home loan you already have needs to be at least seven months old. There should be a time period of six months after your first payment due date to move forward for an FHA streamline refinance program.
• And lastly, you must not have refinanced for the past six months to get qualified for an FHA streamline refinance in Maryland.

 

What can you do if you don’t qualify for the refinance program?

It is not uncommon for people to be deemed ineligible for a variety of reasons. One of them is moving into a new property and assuming the loan from a previous owner. To deal with such problems, FHA offers a modified and updated version of the refinance program called the Credit qualifying streamline refinance. You will need to provide documentation of your income, credit report, and debt-to-income ration calculated on the FHA streamline refinance calculator. The paperwork is more time-consuming when compared to the streamline refinance program, but it is still quite an impressive alternative to a standard refinance scheme. If your home loan is continuously elevating your monthly payments, credit qualifying streamline refinance is the perfect solution for you.

With the historic low-interest rates and a plethora of benefits, you cannot miss this opportunity to get FHA streamline refinance in Maryland.

Get pre-approved today to enjoy the boons of getting refinanced!

Annapolis mortgage group offers FHA Streamline Refinance in Maryland and ready to help you get pre-qualified for the program. Just fill out the free online application, and one of our mortgage professionals will contact you as soon as possible to discuss your options.

Home to the plethora of major military installations, Maryland is a popular choice for veterans to settle in. The peaceful and tranquil coast offers the perfect location to purchase your new home. If you are or have been in the armed services, you can take advantage of the VA home loans for up to 100% financing of your home. For a military veteran, qualifying for a VA loan benefit is simple, easy, and extremely convenient. But before we move forward to the VA loan requirements, let’s discuss what a VA loan is.

What is a VA loan?

A VA loan is a mortgage loan created especially for veterans by the United States Department of Veteran Affairs. The loan allows all different kinds of veterans, service members, and the eligible surviving spouses to purchase a home. You can get a VA loan to buy, build, repair, or even retain a house. It offers 100% financing on the total value of your home irrespective of you being a first-time homebuyer or a seasoned homeowner. VA loan requirements in Maryland are quite lenient and accommodating. They offer a plethora of benefits including low-interest mortgage rate, lack of down payment (optional), lack of insurance premium, low credit limit, and more.

Know more about VA loan benefits and your eligibility now!

What are the benefits of getting a VA loan?

VA loans offer several benefits for military veterans to enjoy while purchasing their dream home.

• One can get away without a down payment if the lender doesn’t require so. If the purchase price of your house is more than the established property value, you might need to put down a down payment but otherwise, you are good to go.
• The closing costs are extremely limited. You can even get your seller to pay for it and save some additional expenses.
• You do not need to pay any private mortgage insurance premium that most home loans mandate. It lowers your monthly installment as well as saves a lot of money in the long run.  
• VA offers expert assistance to help borrowers avoid defaults and maintain regular payments.
• You might not be charged with any prepayment penalties; it depends from lender to lender.
• Some counties in Maryland even offer some additional benefits including property tax reductions to make VA loans more attractive and advantageous.
• The VA loans allow lenders to determine their own criteria which results in enhanced leniency and forbearance. This also allows veterans with low credit scores to find a lender who is open to negotiation.
• As VA loans are specifically created for struggling veterans. They allow veterans to qualify for a low-interest VA mortgage which can be quite beneficial in the long run.
• VA loans are not limited to first-time home buyers and allow you to reutilize the benefits according to your convenience. You can even assign your home loan to another qualifying person if you want to.

So, what are you waiting for? Get pre-approved to apply for own VA loan today!

What are the VA loan requirements in Maryland?

Now that we have discussed the several benefits of getting a VA loan in Maryland, let’s confer on the loan requirements that you need to qualify in order to get one.

Here are the necessary VA loan eligibility requirements to get approved for your VA home loan in Maryland.

• Active time served– VA loan requirements need you to serve at least 90 days or more of active duty during wartime to qualify for the loan. If you have not served any active time in warfare, do not worry, you can still get approved. You will need to have served 181 days or more of active duty during peacetime to qualify. If your time served in active service is any less, you will not be eligible for the benefits of the VA home loans.
• Honorable discharge– You need to have been discharged under circumstances that are honorable and at par with the ethics that our veterans go by. Dishonorably discharged veterans will not qualify for VA home loans in Maryland.
• Spousal requirements– If you are the surviving spouse of a deceased veteran, you can get qualified. The veteran has to have died during his term of service or because of some service-related injury for his/her spouse to qualify. Moreover, the spouse needs to stay unmarried at the time of attaining the loan. A remarried relative will not be eligible for VA loans.
• Required credit score– VA loan requirements are quite lenient and allow lenders to set up their own criteria. This is enormously convenient for if you do not meet the credit standards of one lender, you can always go to another who offers the loan at a lower credit score. The general credit score that most lenders can do is 550 so if you are anywhere near, you will easily qualify.
• Payment history– Your payment history plays a crucial role in getting your qualified or disqualified for the loan. The VA approval process takes a look at your credit history of the past 12 months to determine whether you are eligible or not. You need to have a clean payment history, without any late payments or defaults to get approval. If there are any discrepancies, you will be deemed unreliable and incapable to make repayments. Although, VA loans do allow veterans with past bankruptcy (1 to 2 year waiting period depending on type) and foreclosure if their financial statement is clean for the last 2 years.

Think you meet all the basic requirements mentioned above? Get approved and start your application process today!

Conclusion

Specifically for veterans, VA home loans are an excellent option for members of the armed forces looking to purchase their own house. With such a large and extensive variety of benefits, these government-backed loans are your best bet for getting your dream house. The lenient loan requirements and the convenient application process makes it much extremely easy to get a home loan in Maryland.

Are you ready to take the first step? Connect with a VA home loan specialist and determine your eligibility now!

FHA loans are some of the easiest mortgages to be approved for. FHA loans are guaranteed by the Federal Housing Administration, and they are designed for homeowners who may have damaged credit, are unable to make a large down payment, or are first-time homebuyers.

Best Candidates for FHA Loans

• Borrowers with damaged credit
• Borrowers unable to make a large down payment
• Borrowers who receive their down payment as a gift
• First-time homebuyers

Advantages of FHA Loans

• Low down payment requirements
  The required down payment on FHA loans ranges from 3.5% to 10% of the purchase price of the home, depending on your credit score.
• Down payment funds can be received as a gift
  Many programs do not allow down payments to be received as gifts. With FHA loans, down payments can always be received as gifts.
• Low interest rates
  The market for FHA loans is very competitive, so interest rates tend to be very low on FHA loans.
• Bankruptcy & foreclosure forgiveness
  Recent bankruptcies and foreclosures are not dealbreakers. It is possible to become approved even if there was a recent bankruptcy or foreclosure if you can re-establish credit.
• Sellers can credit closing costs
  The seller can credit the closing costs for your loan by up to 6%.

Downsides of FHA Loans

• Mortgage insurance
  Mortgage insurance, also known as PMI or MIP for FHA loans, is required throughout the life of the loan. On conventional loan programs, mortgage insurance is required when the down payment is less than 20%.
• Not all properties qualify
  FHA loans cannot be made on all properties. For instance, FHA loans cannot be acquired on properties that pose safety issues that would require a renovation.
• Lending limits
  Lending limits as of 2018 for one-unit dwellings is $679,650. In low-cost areas, the limit for one-unit dwellings is $294,515.

How to Qualify for an FHA Loan

If you are looking for an FHA loan, you need to meet the following requirements in order to qualify.

1. Credit requirements
   For an FHA loan, you need to meet a minimum credit score of 500 (or 580 to take advantage of a 3.5% down payment).
   
2. Down payment requirements
   You need to meet a minimum down payment of 3.5% if you have a 580+ credit score. If you have a 500+ credit score, the down payment requirement is just 10%. 
   
3. Debt to income ratio requirements
   Your debt to income ratio cannot exceed 43%. Debt to income is calculated as the sum of all debts divided by your gross income. For example, if you have an auto loan ($250 monthly payment), an installment loan ($200 monthly payment), and are looking for a mortgage ($2,000 monthly payment), your total monthly debt is $2,450. If you have a monthly income of $6,000, then your debt to income is $2,450 divided by $6,000 or 40.8%.

FHA Loan Summary

Down Payment Advantage
Credit Score: 580+
Minimum Down Payment: 3.5%
Debt to Income Ratio: 43% or less
Mortgage Insurance: Required

Standard
Credit Score: 500+
Minimum Down Payment: 10%
Debt to Income Ratio: 43% or less
Mortgage Insurance: Required