Government Mortgage Versus Conventional Home Loans – Mortgage Refinancing Differences

This article summarizes the differences between conventional and government loans for first-time buyers, homeowners have mortgage refinancing, and those relating to cash-equity consolidation loans, debt consolidation or home improvements with home equity loans (second mortgages).

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Conventional mortgage

• It is not guaranteed or insured by the Federal Government.

• Features 0{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} to 20{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} down payment options.

• In general, fixedMortgage rates for 15 to 30 years or variable rate mortgage (ARM).

• Maximum limit $ 417,000 under. Otherwise it is a jumbo or non-conforming conventional loans.

Government mortgage

• insured against default by the federal government that less stringent qualification:

– FHA loans are insured by the Federal Housing Administration.

– VA loans are guaranteed by the Department of Veteran Affairs.

• FHA loans require 3{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} down toPayments and are 15 and 30 years fixed rate loans or ARMs 1 years.

• VA loans are only eligible veterans or surviving spouses of deceased veterans.

• No deposit required permits up to 100{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} financing.

• Maximum loan amounts for government bonds are geographically defined.

• Mortgage lending in government bonds is only to existing shareholders of government mortgage.

Stated Income Mortgage Loans

“The stated-incomeLoans are for people who have the money they say they do, do, but this amount is not shown on the bottom line of their income taxes, “says Hugh McLaughlin, president and CEO of KMC Mortgage Services Inc., a lender and broker Naples, Florida. They are non-conventional loans with higher rates than conventional mortgages – borrowers interest rates depends on several factors: income stability, debt-to-income ratio, credit score, down payment and property appraisal value

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