Examples of Mortgage Options

Now that you are familiar with a glossary of mortgage concepts, and you have a good grasp on the basic types of loan programs that are available to today's homebuyer, you are ready to see some examples of how these mortgage programs work in the real world.

Real world situations

What kind of loan programs are currently offered to homebuyers in Pinellas County? With a little help from a mortgage broker, you can take advantage of a broad range of mortgage products that extend beyond those advertised on the retail loan market (bank posters, TV ads, etc).

While different mortgage brokers and real estate offices may offer similar or competing programs with different terms and conditions, these programs are listed here to serve as an example of what you might expect as if you shop for a home loan in Pinellas County, Florida.

FHA203 Residential Loan Program (97.75% LTV)
This program offers the homebuyer the opportunity to purchase a primary residence (1-4 housing units, ie. single family home or duplex or quadplex) with as little as 3% out-of-pocket cash at closing with the seller contributing up to 6% of the purchase price toward the buyer's closing costs. No liquid asset reserves are required. First-time homebuyers are especially welcomed. FHA mortgage insurance is required. Up to 41% (sometimes even higher) DTI allowed.

VA Guaranteed Loan Programs (100% LTV)
Eligible veterans, surviving spouses of eligible veterans and eligible members of the U.S. Armed Forces on active duty can obtain 100% financing on the purchase of their primary residence (1-4 units). In addition, the seller can contribute up to 4% of the purchase price toward the buyer's closing costs. No liquid assets are required. First-time homebuyers are welcomed. No mortgage insurance is required. A one-time VA funding fee (which can be financed) is charged to the buyer at closing. Up to 41% DTI allowed.

Expanded Criteria Mortgage Programs
These first mortgage programs are designed for "A" Quality borrowers who have difficulty qualifying for a conforming mortgage due to certain loan characteristics, such as income documentation, DTI ratio, type of property, or a non-occupant co-borrower. Non-occupant co-borrowers are allowed on the purchase of a primary residence or second home with Full Doc loans . The non-occupant's income must be verified.

Full Documentation (Full Doc) Loans

• 100% LTV to $300,000 for primary residence (1-2 units), PUD or 1-8 story condo. Minimum credit score required. 2 months liquid asset reserves required. 36%/40% DTI. No non-occupant co-borrowers. OK for first-time homebuyers with 6 months liquid asset reserves.
• 95% LTV to $400,000 for primary residence (1-4 units), PUD, or condo. Minimum credit score required. 2 months liquid asset reserves required. 36%/40% DTI.
• 95% LTV to $300,000 for second or vacation homes (1 unit), PUD or 1-8 story condo. Minimum credit score required. 2 months liquid asset reserves required. 36%/40% DTI. No first-time buyers. No non-occupant co-borrowers.

Expanded Criteria 100% Mortgage Program
This program offers the homebuyer a 100% purchase money loan on a primary residence (1-2 units), PUD or 1-8 story condo. Minimum 720 credit score required. 2 months liquid asset reserves required. 36%/40% DTI. No non-occupant co-borrowers. OK for first-time homebuyers with 6 months liquid asset reserves.

Vacation Home 95% Mortgage Program
This program offers the homebuyer a 95% purchase money loan on a second or vacation home (1 unit), PUD or 1-8 story condo. Minimum 680 credit score required. 2 months liquid asset reserves. 36%/40% DTI. No first-time buyers. No non-occupant co-borrowers.

Vacation Home 95% Mortgage Program II
This program offers the homebuyer a 95% purchase money loan on a second or vacation home (1 unit), PUD or condo. Minimum 620 credit score required. 2 months liquid asset reserves. 36%/40% DTI. No first-time buyers. No non-occupant co-borrowers.

 Did you know?

  A Purchase-and-Repair Loan can cover the costs of rehabilitating and customizing your new home, all in one payment.

Single Closing Purchase-and-Repair Loans (95% LTV)
This program provides the homebuyer, the opportunity to purchase a primary residence in need of renovation or repairs, and finance to purchase the improvements in one loan up to 95% of the value of the property after repairs. This can be extremely valuable when shopping for a "handy-man special" or "as-is" foreclosure.

10% Down - Investment Property (90% LTV)
This program offers the investor a 90% LTV purchase money loan on a one to four-unit investment property with up to 3% seller contribution to buyer's closing costs permitted. Up to 40% DTI allowed. 95% CLTV permitted with outside or seller-held second mortgage.

5% Down - Investment Property (95% LTV)
This program offers the investor a 95% LTV purchase money loan on a one or two-unit investment property with up to 3% seller contribution to buyer's closing costs permitted. Up to 45% DTI allowed.

5% Down - Stated Income Loans (95% LTV)
This program offers the homebuyer a 95% purchase money loan on a primary residence using stated income on their application. Ideal for self-employed borrowers that are unable to document their income. Up to 3% seller contribution to buyer's closing costs is permitted. First-time homebuyers are OK. No mortgage insurance required.

Summary of the loan process

As we have shown in the prequalification process, lenders vary considerably in the rates and terms they offer, so it pays to shop around. You will need a good deal of information to compare various lenders' policies and terms, so approach your information-gathering systematically, be specific about your needs, and ask questions.

Following the loan processing, you will be notified as to whether your application has been accepted or denied. If your application is not approved, find out why and take steps to correct the situation. If your application is approved, you're well on your way to home ownership.