Find The Right Mortgage For You
If you’re ready to purchase a home, finding the right home loan, also called a mortgage, shouldn’t feel impossible or overwhelming. That’s why reaching out to us at Arkansas Federal Mortgage is a great move. We understand that no two homeowners are the same, and have different needs. That’s why we offer various mortgage options to find the perfect fit for each member.
Choosing the right mortgage that suits your needs and budget is crucial to becoming a homeowner. Whether it’s your first (or next) home we offer different home mortgages to create a smooth home buying experience.
Understanding Your Mortgage Options
Knowing all your mortgage options and understanding which one is best for you is not as easy as it may seem. That’s why, we’re here to break it down for you as best we can to help you choose the best mortgage type for you.
But first, what exactly is a mortgage? A mortgage is a contract between a homebuyer and a banking institution where money is loaned with interest. Mortgages have two main components, principal and interest.
A major contributing factor to choosing the best mortgage option for you is the annual percentage rate (APR). The role that APR plays in the mortgage process boils down to the yearly interest rate set by the borrowers, which directly impacts your monthly payments.
Conforming and Non-Conforming Mortgage Loans
You may wonder, “What kinds of home loans are there?” Although we cover each main type of loan below in more detail, there are two major concepts to understand when looking at different house loans. Home loans are either conforming or non-conforming loans.
Conforming loans meet the Fannie Mae and Freddie Mac requirements and can be sold to federally-backed mortgage buyers. Certain requirements for conforming loans include the loan amount and other rules that outline the loan terms.
Non-conforming loans, in simple terms, is a loan that fails to meet the federal funding criteria to be sold to either Fannie Mae or Freddie Mac. A few common things that will keep you from meeting this criterion are if your loan amount is more than the adjusted limit, your credit score is too low, your income isn’t high enough for the loan amount, or irregular use of the loan.
Types Of Mortgage Loans
Not every mortgage is the same. Mortgages vary depending on the loan type and the total amount borrowed. There are a few variations in the mortgage process, depending on which mortgage loan you get, including your down payment total, closing costs, and interest rates.
With so many different home loan options available, it’s essential to understand all your options and work with a trusted lender, like Arkansas Federal Mortgage.
One of the most popular mortgage types is a conventional loan. In simple terms, a conventional loan can be conforming or non-conforming. The federal government does not insure non-conforming loans. Conventional loans are typically recommended to those with minimal debt and a good credit score.
Arkansas Federal offers unique benefits when taking out a conventional loan, such as low down payments, a zero-cost application fee for getting pre-qualified, and the ability to lock in your rate up to 90 days before closing once you’re approved.
Government-Insured Veterans Affairs (VA) Loans
A VA loan is a great mortgage solution if you are an active duty service member, veteran, or a surviving spouse. This mortgage type is guaranteed by the United States Department of Veterans Affairs. VA loans offer $0 down payment options to finance a primary residence with competitive-interest rates and no mortgage insurance. This loan can also be used to refinance an existing mortgage.
A Federal Housing Administration, or FHA loan for short, is one of the most commonly used loans amongst first-time homebuyers. If you are looking for a mortgage loan with low down payments and flexible guidelines, then an FHA loan may be the right choice for you. This type of loan is popular because it allows you to apply with a lower credit score. Because this type of loan protects the lender from losses, it opens the door to homeownership for people who wouldn’t otherwise qualify for a conventional mortgage.
Construction loans are perfect if you’d like to build your dream home or renovate an older home.
Arkansas Federal offers competitive rates on construction mortgages. Plus, with just one application and one closing you’ll get the money you need to build your home and finance it.
A United States Department of Agriculture loan is designed to aid small towns and develop rural communities. When working with Arkansas Federal, you can enjoy a $0 down payment and loan amounts of up to 100% of your purchase price. This specific loan type comes with a competitive interest rate and an easy application process. However, USDA loans can have geographical restrictions, so check in with our mortgage team to see if the property you’d like to buy qualifies.
A jumbo loan is a great way to get a bigger home. Conventional loans can only lend up to specific amounts set by federal regulations, so most luxury homes aren’t eligible for traditional mortgages. A jumbo mortgage loan is made for when you need to borrow a large amount of money that other loans don’t typically cover. If you need to borrow more than a conventional loan can offer, you may want to consider a jumbo loan.
Manufactured Home Loans
Finding an affordable home or vacation property is challenging when supply is low, prices are high, or available properties need renovations. That’s why a manufactured home loan could be a great option! Manufactured homes are built to the highest standards and often include trending amenities. These homes are made at a high-quality facility, brought to your location, and assembled on your home site.
Just like our other loans, our loans for manufactured homes come with a low down payment, a no cost pre-qualification application, and the ability to lock in your rate for up to 90 days once you’re approved.