Conforming/Conventional Loans:

The criteria for these Midland home loans are established by Freddy Mac (FHLMC) and Fannie Mae (FNMA) every year in October according to mean home prices as well as income to debt ratio. The system of these loans is slightly complicated. Firstly, lending institutions or banks lend the money to the buyers provided the buyer meets the requirements for home loans.

The two stock holding companies mentioned above purchase the mortgage loans from lending institutions such as banks. As a result, the institutions including banks earn money to fund more loans. The stock companies meanwhile only buy conforming loans to repackage into the secondary market. This ensures that demand for conforming loans stays high in the market while the demand for non conforming loans falls.

FHA Loans:

A Federal Housing Administration (FHA) Loan is another attractive option for a buyer. Primarily, these loans are easier to qualify for than Conventional Loans. The down payment on these loans is lower as well. The mortgage rates cannot exceed statutory rate limits. These loans are issued by federally qualified lenders and are insured by the US FHA.

VA Loans:

This is an option for veterans of the US Military. These loans are issued by federally qualified lenders like FHA Loans. They are insured by the US Veterans Administration. As a result of this, interest rates are lower due to the lower risk involved in the case of default. There are many advantages of this system.

100 percent financing can be done without private mortgage insurance. Only 0 to 3.3 percent of the loan amount is paid to the VA. Veterans can borrow up to 100 percent of the sales price of the home when purchasing it. In the event of having to refinance, veterans can borrow up to ninety percent of reasonable value if allowed by state law.

RHS (USDA) Loan Programs:

The Rural Housing Service is run by the US Department of Agriculture. These loan programs allow low income as well as moderate income families who do not have credit from other sources to purchase homes. These houses are usually low priced. There is low to no down payment if one takes out these loans. The settlement costs are minimal too.

These loans can be used to purchase or refinance a previously owned home or a new construction. Nonetheless, the families taking out these loans must be able to pay property tax, homeowner’s insurance and monthly mortgage.

Mortgage Refinance

FHA Streamline Refinance:

The FHA allows a homeowner to refinance the home without home appraisal. This simply means that in the FHA’s eyes, the home costs as much as it did when it was first purchased. No credit score, income and employment verification is required. This loan can be refinanced at adjustable rates as well as fixed rates. They come in 15 or 30 year terms and of course, there is no prepayment.

One might wonder how this benefits the FHA. The FHA of course insures loans. As a result, the FHA will lose more if people default on Midland mortgage loans. To prevent people from defaulting, the FHA helps to lower monthly payment rates. As a result, fewer people default on their mortgages.

Homeowners with conventional FHLMC and FNMA loans are ineligible for this opportunity.

VA Streamline Refinance (Interest Rate Reduction Loan):

Veterans of the army can lower their mortgage rates by doing this kind of refinancing. However there are some important things to remember when considering refinancing of this kind. Before applying, the homeowner must make sure he or she paid the mortgage regularly within the previous year. Only one 30 day late payment will be accepted.

The homeowner must certify that he or she lived in the property previously. No cash can be accepted from IRRL. The VA Loan eligibility must have been used for the property before, such as when previously purchasing it. Also, the new monthly payment for the IRRL must be lower than the previous rate unless an adjustable rate is being converted to a fixed rate.

Conventional Refinance:

The initial down payment for a conventional loan is usually high. The down payment comes into play when qualification for conventional refinancing is required. If the homeowner does not have a twenty percent home equity at least, he or she will have to get involved with a private mortgage insurance company. Monthly costs will hence rise.

However, this insurance can be cancelled after two years unlike in the case of FHA, where insurance is required for five years. An appraisal is required to refinance a conventional loan. If there is difficulty in obtaining insurance, the lenders may be able to self insure the loan. The borrower and lender will be able to negotiate service fees. Also, the borrower only has to meet the guidelines of the lender rather than that of the FHA or VA’s more strict ones.

Finally, these are all the options available to new homeowners or homeowners who need to lower their monthly mortgage payments. Midland is a beautiful place to live in. It is of course the home of former first lady Laura Bush. Purchasing a home is much easier with the Midland home loans and Midland mortgage options available.

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