What is a Conventional Loan?

A conventional mortgage is a non-government loan that meets requirements set by the Federal Housing Finance Agency (FHFA) and meets the funding criteria of Freddie Mac and Fannie Mae. Conforming loans offer low interest rates to borrowers with excellent credit scores.

Competitive Rates and Countless Options

Homebuyers seeking a conventional loan typically enjoy the largest selection of loan options at the most competitive rates. Since risks and guidelines are well-defined, conventional loans are popular with both mortgage lenders and homebuyers. Most lenders will offer several different programs tailored to different homebuyer situations, which means you can shop for the most competitive rates and terms to maximize how much you can get from a loan.

Who should you get one?

• Homebuyers with good credit (scores as low as 620) and a qualifying debt-to-income ratio
  
• Homebuyers who do not need to borrow more than their county limits

Features

• Both fixed- and adjustable-rate options available
  
• Financing up to 97% of the purchase price (up to 95% with conforming high-balance)
  
• Loan amount may not exceed county limits (varies on a county-by-county level)

If you don’t qualify for a Conventional loan:

Conventional loans are popular because they have such clearly defined guidelines. For anyone who doesn’t meet those guidelines, Watkins Home Loans has other options like FHA loans or Expanded (Non-QM) loans to help you qualify for the property you love.

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What is an FHA Loan?

An FHA loan is insured by the Federal Housing Administration (FHA) and issued by an FHA approved lender. Since these loans were designed for low-to-moderate income borrowers, they offer options to borrowers with lower minimum down payments and credit scores. While FHA loans are popular with first-time homebuyers, they are available to anyone who qualifies.

A Popular Loan for less-than-perfect Credit

FHA loans are one of the easiest mortgages to qualify for because they don’t require a large down payment and they are more flexible with credit scores. FHA loans are widely used by first-time homebuyers and can require upfront and annual mortgage insurance premiums.

With an FHA loan, you are able to use gift funds (such as a monetary gift from a family member) towards down payments and closing costs.

There are no prepayment penalties with a FHA mortgage, allowing you to refinance or pay off your home early without having to worry about paying an extra fee.

Because you are making a lower down payment, you will have to pay for ongoing private mortgage insurance (PMI) to make up the difference. You also have to pay an upfront mortgage insurance fee. This can be financed, but it will cause your mortgage insurance payments to be more expensive.

If a condominium fits your housing needs, be aware that the if you are using FHA financing, the condominium being purchased must be on a list of FHA-approved units. Many condominium projects are currently not on the FHA approved list.

Who qualifies for FHA loans:

• Homebuyers with lower credit scores
  
• Individuals with low-to moderate-incomes
  
• Borrowers who can afford down payments as low as 3.5%

Benefits of an FHA loan:

• More flexible qualification requirements than other mortgage loans
  
• Down payments as low as 3.5%
  
• Credit scores as low as 580
  
• Financing up to 96.5% of home purchase price

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What is a USDA loan?

A USDA loan is a mortgage loan offered to rural property owners by the United States Department of Agriculture (USDA). The USDA loan program is also known as the USDA Rural Development Guaranteed Housing Loan Program.

Special financing for USDA rural housing

The USDA provides special financing opportunities to homebuyers who live or would like to purchase a primary residence in rural areas as defined by the USDA. Not sure if the home you want to buy is located in a rural area? Check here.

USDA loans, or Rural Development loans, are available to homebuyers with low-to-average income for their area, offer 100% financing with reduced mortgage insurance premiums and feature below-market mortgage rates.

USDA home loans are helping many people buy homes rather than continue to rent.

Who can qualify for a USDA loan?

• Anyone who lives in or will purchase in areas defined by the USDA as rural
  
• Households with a low-to-moderate income for their area
  
• First-time and repeat homebuyers

Benefits of USDA financing programs:

• 100% financing of the purchase price
  
• Better-than-average interest rates
  
• Credit scores as low as 600
  
• Zero down payment options

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What is a VA Mortgage

The Veterans Affairs (or VA) loan is a specific loan program to help veterans, active-duty service members and their families purchase a home. Authorized by the US Department of Veterans’ Affairs, this loan option allows military families to qualify for a home loan with fewer restrictions and little or no money down.

Do You Qualify For a VA Home Loan?

While there are far less restrictions for qualifying for a VA loan in comparison to other loan options, there still are a few stipulations. To decide if you will qualify for a VA loan, ask yourself these three questions:

1. Are you a current or ex military personnel, or a surviving spouse of one?
2. Do you have no past record of loan defaults within the last 12 months?
3. Have you not declared bankruptcy within the last two years?

If you answered “yes” to all three of these questions, chances are that you qualify for a VA loan.

Is a VA Mortgage Right For You?

The VA loan remains one of the few mortgage options for borrowers who don’t have the money for a down payment. Available to millions of veterans and active military members, VA loans are somewhat easier to qualify for than conventional mortgages.

VA loans are fully backed by the government, and are made through private lenders and guaranteed by the Department of Veterans Affairs, so they do not require mortgage insurance. There’s no minimum credit score requirement.

Features

• As low as 0% down payment
• No Private Mortgage Insurance (PMI)
• Fewer Restrictions – VA loans allow for higher debt-to-income ratios and more leniency with credit than conventional loans.

Benefits

• With a 0 down payment option, you can purchase a home with less out-of-pocket cash.
• With no private mortgage insurance required, you save money on your monthly home loan payments.
• Fewer restrictions make it easier for you to qualify. With a VA loan, you’re allowed a higher debt-to-income ratio and have more leniency with your credit score than conventional loans.
• The ability to borrow up to 100% of the home’s value
  

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

You Can Own a Home. We can Help.

Saving for a down payment is often the hardest part in the homebuying process–but it doesn’t have to be. Since we started helping people into homes, Watkins Home Loans has been an advocate for affordable lending programs. We work with counties across the nation to offer over 500 down payment assistance programs that help you become a homeowner, sooner.

What are Down Payment Assistance (DPA) Programs?

Down payment assistance (DPA) programs are available county-by-county and city by city to offer first-time homebuyers assistance with down payment and closing costs to purchase a home.

How do down payment assistance (DPA) programs work?

Down payment assistance is provided in the form of a loan or grant–secured as a lien against the property – and may be forgiven over time.

Benefits

• Increase your buying power
  
• Potentially avoid mortgage insurance requirements
  
• Grant money that may not have to be paid back.

Who qualifies for DPA programs?

• Eligibility is most commonly based on income, however, that can vary depending on the property location.
  
• First-time homebuyers
  
• Individuals with incomes below area median levels
  
• Borrowers with little to no money saved for a down payment

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What is an Expanded (Non-QM) Loan?

An Expanded loan, also known as a Non-QM loan, is an out-of-the-box alternative designed to deliver one thing: flexibility. When other loans aren’t quite cutting it, an Expanded loan can bridge the gaps. Several programs are available and have been tailored to meet the needs of different groups of borrowers.

Get more Financing Flexibility with a Non-QM Loan.

Not everyone fits the mold of what home lenders consider “qualified”. You might have money in the bank, but an irregular income stream. Or maybe you’ve invested well and are living off the fruits of your labor.

Who is Eligible for a Non-QM loan?

• Professionals with stock options on a future vesting schedule
  
• Retired individuals using social security, pension or investments as income
  
• Doctors, dental surgeons and veterinarians
  
• Amazon employees with a signing bonus, stock options and/or salary
  
• Self-employed individuals
  
• Anyone with a lower credit score and less cash reserves

What are the Benefits of Non-QM loans?

• Loan amounts from $100,000 to $3 million
  
• Leverage alternative income sources
  
• Flexible qualification requirements
  
• Non-warrantable condos can qualify
  
• Interest-only financing available
  
• Bank statement options
  
• Allows for employment gaps
  

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What are Renovation Loans?

Maybe you’ve found the perfect location, but the house needs improving. Maybe staying in your current (but outdated) home is what’s important. Either way, a renovation loan lets you make upgrades now and pay over time–so you can create a place you’re proud to call home.

We’ll help you Create your Dream Home

Whether you’re considering a fixer-upper or dreaming of remodeling your current home, a Renovation mortgage loan helps you get the job done.

Renovation loan benefits and advantages:

• Create your dream home
  
• One single transaction for purchase or refinance and renovate
  
• Borrow based on future estimated home value
  
• Distribute renovation costs over the life of the loan

What House Renovation Loan options do you have?

• Conventional – Allows for most upgrades, including luxury home improvements
  
• FHA 203(k) – Backed by the government and offers a low down payment
  
• FHA 203(k) Limited – Designed for smaller, quick projects, cosmetic or minor repairs

How does a Renovation Loan Work?

A renovation loan lets you purchase or refinance a home in almost any condition, make improvements and pay for them over time. Consolidate the cost to buy or refinance with the estimated remodeling costs. We connect you with a renovation specialist and you select your preferred contractor to complete the work.

What types of Remodel Projects Qualify?

No project is too big or too small. From room additions to new kitchens to painting and landscaping–we’ve seen it all.

• Remodel kitchen and bathrooms
  
• Upgrade electrical, plumbing, heating and air conditioning
  
• Add an accessible entry
  
• Repair cracked slabs or make structural improvements
  
• Install new flooring, windows, doors, cabinets and appliances
  
• Build a swimming pool

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

What is a Jumbo Loan?

Home loans fall into two categories based on their loan amount: conforming and jumbo loans. If you need a home loan that’s over the conforming limit, you will probably need to get a Jumbo mortgage.

Jumbo loans offer the same flexibility as conforming loans, however the only difference is that they are not eligible for purchase by Fannie Mae or Freddie Mac and must be sold in the secondary market. This means that the rates for Jumbo loans will be slightly higher than home loans with similar terms that are conforming loans. Sometimes Jumbo loans are referred to as non-conforming loans.

Is a Jumbo Loan Right For You?

If you are able to afford a more expensive home, but haven’t saved up enough money to bring the loan down to conforming limits, a jumbo loan is a great option for you.

If you ’re looking to find your “forever” home, and know that as time goes on your income will increase, a Jumbo loan could be an affordable home loan option for you. This may be a good way to bypass the “starter home” and prevent you and your family from moving at a later date to a bigger home.

Features

• A “non-conforming” loan allows for mortgage amounts above the maximum conforming loan limits.
• Available in a variety of fixed-rate and adjustable-rate loan options.

Benefits

• Obtain financing for loan amounts higher than the Fannie Mae and Freddie Mac conforming limits.
• Get the convenience of one loan for the entire loan amount.
• Choose from a variety of loan options.

30 Year Fixed Rate Mortgage

A 30 year fixed rate mortgage is a very popular home loan option. It’s long term and fixed rate makes it attractive to many home owners. Homeowners with a 30 year fixed rate mortgage will have payments that stay the same, allowing them to know exactly how to budget their finances every month.

Is a 30 Year Fixed Rate Mortgage Right For You?

To decide if a 30 year fixed mortgage is right for you, ask yourself these three things:

1. How Long Are You Planning On Staying In Your Home?
   If you’re considering getting a 30 year fixed rate mortgage, you should also be planning on staying in your home for more than 5-7 years.
2. Do You Prefer Your Monthly Mortgage Payment To Stay The Same?
   30 year fixed rate mortgages are famous for having an interest rate that doesn’t change for the entire life of the loan, keeping your mortgage payments the same month-after-month, for 360 months.
3. Do You Want a Low Mortgage Payment?
   Due to the long nature of this loan, a 30 year fixed rate mortgage makes your monthly mortgage payments more affordable in comparison to shorter length fixed rate mortgages (like a 15 year fixed rate mortgage). You end up paying more interest over the 30 years, but the principal repayment is spread over that same time period, which gives you more manageable payment amounts.

Features

• Your interest rate and monthly principal and interest (P&I) payments remain the same for the life of your loan.
• A 30 year loan term offers a lower month payment than a short loan term, such as a 15 year loan.

Benefits

• A 30 year fixed rate mortgage gives peace of mind to homebuyers who don’t want to worry about fluctuating mortgage payments.
• Predictable monthly P&I payments allow you to budget more easily.
• Protection from rising interest rates for the life of the loan, no matter how high interest rates go.
• May be a good choice if you plan to stay in your home for a long time.

15 Year Fixed Rate Mortgage

A 15 year fixed rate mortgage is in many ways similar to a 30 year-fixed rate mortgage. Your rate stays the same throughout the life of your home loan, giving you security and predictability with your monthly mortgage payments.

The main difference is shorter loan term. With a 15 year-fixed rate home loan, you’ll be able to pay off your mortgage in a shorter amount of time. In addition, with a 15 year fixed rate mortgage, you’ll be able to take advantage of a lower rate than what’s available with a 30 year fixed home loan. A shorter loan term plus lower mortgage rates means paying less interest on your loan – saving you more money!

One point to note: a 15 year fixed rate mortgage will have a higher monthly payment than a 30 year, so you’ll need to factor that into your budget.

Is a 15 Year Fixed Rate Mortgage Right For You?

A 15 year fixed rate mortgage can be a great home loan for many people; specifically, it is very popular for two different types of homebuyers.

First, young homebuyers with sufficient income find 15 year fixed rate mortgages popular as they enable these homeowners to pay off their home quickly before their children begin college.

Second, homebuyers with an already established career and higher income find 15 year-fixed rate home loans attractive as they can pay off their mortgage faster before they retire.

Features

• Your interest rate and monthly principal and interest (P&I) payments remain the same for the life of your loan.
• A 15 year fixed rate mortgage will have a higher monthly payment than a 30 year, so you’ll need to factor that into your budget.

Benefits

• A 15 year fixed rate mortgage gives peace of mind to homebuyers who don’t want to worry about fluctuating mortgage payments.
• Predictable monthly P&I payments allow you to budget more easily.
• Protection from rising interest rates for the life of the loan, no matter how high interest rates go.
• Short loan term allows you to pay off the loan sooner, thus saving you on the total interest paid.

Adjustable Rate Mortgage

An Adjustable Rate Mortgage, or ARM, is a loan option whose interest rate changes after a fixed number of years (typically 5 or 7 years). After this fixed period of time, the rate will likely adjust, either increasing or decreasing your monthly payments.

An ARM is a common alternative to a fixed rate mortgage, typically offering lower initial interest rates and payments than you’d be able to obtain with a fixed rate mortgage.

Is an ARM Mortgage Right For You?

Are you thinking about moving or upgrading your home in a few years? Adjustable rate mortgages are a cheaper way to buy a home when you don’t plan on staying in it past 5-7 years. This is due to their lower initial interest rates and lower monthly payments.

If you want the lowest rate currently available, an ARM can provide you with it. ARMs transfer part of the usual “interest rate risk” carried by all home loans, from the lender to the borrower since the borrower is taking advantage of lower initial payments by risking the possibility that the mortgage interest rate could increase after the initial term.

Features

• Your interest rate and monthly principal and interest (P&I) payments remain the same for an initial period of 5, 7, or 10 years, then adjust annually. Your monthly principal and interest payments may increase when the interest rate adjusts.
• Your monthly principal and interest payments may change every year after the initial fixed period is over.
• Adjustable-rate mortgages carry lifetime and periodic rate caps, limiting the total rate change your loan can experience each period and over the life of your loan.
• Loans available in a variety of terms.

Benefits

• Typically ARMs have a lower initial interest rate and payment than on a fixed-rate mortgage.
• The interest rate cap limits the maximum amount your P&I payment may increase at each interest rate adjustment and over the life of the loan.
• May provide flexibility if you expect future income growth or if you plan to move or refinance within a few years.

What is a Reverse Mortgage?

A reverse mortgage is commonly known as a home equity conversion mortgage (HECM). It works by enabling the borrower to access equity in their property and use it to supplement retirement income.

How does a Reverse Mortgage work and Who is Eligible?

All prospective borrowers must meet with a HUD approved counselor and undergo a financial assessment to determine if a reverse mortgage loan is the right solution. You may be eligible for a reverse mortgage loan if:

• You are 62 years of age or older
  
• You own your home and use it as your primary residence
  
• The house is single family, multi-family (up to 4 units) or an approved condominium or manufactured home
  
• You own your own home free and clear or have a small amount left to pay on the existing mortgage
  
• Your home is in good condition prior to taking out the loan

Benefits of a Reverse Mortgage

There are several reasons why homeowners choose a reverse mortgage loan:

• Eliminate monthly mortgage payments
  
• Access the equity you have built in your home
  
• Supplement retirement income
  
• Loan amount is based on your age, home value, and current interest rate and can be dispersed in a lump sum or line of credit
  
• Loan does not have to be repaid as long as you are living in the home and meeting loan terms
  

During the term of your reverse mortgage loan, you will still be required to pay:

• Property taxes
  
• Homeowner’s insurance
  
• Basic home maintenance
  
• Homeowner’s Association (HOA) fees, if applicable
  

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

Lock your Loan & Shop for the Perfect Home

If you are worried about rates going up, you can lock your rate for up to 90 days. With our Lock and Shop program, the rate is locked and secure so you can search for a home you love.

Ideally Suited for:

• Those searching for their next home
  
• Homebuyers in competitive markets.

Rate Lock Benefits

• Interest rate protected for up to 90 days
  
• No property address required
  
• Multiple Loan Programs Eligible

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.