Qualified Mortgage

Know Your Loans

A Qualified Mortgage is a category of loans that have certain, less risky features that help make it more likely that a consumer will be able to afford the loan. The CFPB has established a set of rules for QM loans to provide more stable borrowing requirements. These are meant to protect borrowers from entering loan agreements that they cannot afford to repay.  Common Qualification Documents are but not limited to- 


FHA Loan

The Federal Housing Administration (FHA) is part of the U.S. Department of Housing and Urban Development (HUD). They provide mortgage insurance on loans made by FHA-approved lenders. They insure mortgages on single family homes, multifamily properties, residential care facilities, and hospitals throughout the United States and its territories.

These are called 203 (B) loans. The most popular FHA loan is the 96.5% Loan To Value (LTV) loan, or in another words, 3.5% down payment. 

Mortgage insurance is applied to the FHA loans:



Reverse Mortgage

A Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage, is a special type of home loan only for a  homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment, term payments, or line of credit. A reverse mortgage doesn’t require the homeowner to make any loan payments during their lifetime.  

There are other type of reverse mortgages.  Some are FHA insured and some are not.  Be sure to understand how reverse mortgages work and what they mean for you and your family before borrowing. 


 

VA Loan

VA (Veteran Affairs) helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of their mission to serve you, they provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. Each service member/spouse is provided with a Guaranty, that can change each year, as determined by the VA.

In some cases, the guaranty may allow a borrower to buy a house at 100% Loan To Value (LTV) or in another words, 0% down payment. 


 

Conventional

For conventional, there are also two government sponsored enterprises (GSE's) that accept these loans. 

The best LTV available for conventional loan is 97% Loan To Value (LTV) or in another words, 3% down payment. 

Conventional Loans when Loan To Value (LTV) is 80% or More,  Mortgage insurance is applied depending on credit score, DTI and other factors. 


 

Common Qualification Documents