Loan Programs
USDA
Offered through the USDA Rural Development Housing Loan Program, USDA loans are government backed mortgages for home buyers in eligible rural areas.
Pros: No down payment is required, low-cost mortgage insurance, typically better rates than conventional loans, and low costs monthly mortgage insurnace.
Cons: More restrictive qualification standards, and income limits. USDA loans are also only available in specific geographical areas.
FHA
Offered through the Federal Housing Administration:
Pros: Low 3.5% down payment, low-cost mortgage insurance, more flexible qualification standards including easier to qualify for with challenged credit, and the loan can be assumed by a future buyer of your home.
Cons: Mortgage insurance does not drop off after 20% equity is achieved, only used for owner occupied homes, subject to county loan limits which are often lower than conventional loans. FHA loans also require an upfront funding fee of 1.750% that is rolled into the loan amount.
VA
Offered through the U.S. Department of Verterans Affairs. VA loans are backed by the Federal Government but issued through approved lenders like Canopy Mortgage dba The Knox Mortgage Team.
Pros: No Down Payment or Monthly mortgage insurance, flexible qualification standards, typically lower rates than Conventional loans.
Cons: One borrower must be eligible (aka have VA entitlement), Unmarried co-borrowers must make a down payment, upfront funding fees increases after each use unless veteran is disabled, only used for owner occupied homes.
Conventional Loans
A conventional mortgage is a home loan that isn’t insured or guaranteed by a government agency (like FHA, USDA, and VA). Instead, conventional loans are backed by approved lenders like Canopy Mortgage and the Knox Mortgage Team.
Pros: Best for borrowers with a overall good borrower credit profile, 3% down payment for first time home buyers which is defined as not having owned a home in the past three years, 5% is minimum for non-first time homebuyers, Mortgage insurnace required is less than a 20% down payment. Mortgage Insurnace can be removed when certain equity positios are acheived.
Cons: Higher rates for borrowers with low credit scores. More restrictive debt to income ratios than FHA and VA loans.
Jumbo Loans
Offered by private lenders who have portfolio mortgage guidelines, Jumbo loans limits of Conventional loans.
Pros: Higher loan amounts, competitive rates. Many options for loan qualification standards.
Cons: Significantly more restrictive qualification standards including reserve requirements and lower debt to income ratios allowed.
Knox Mortgage Team offers comprehensive mortgage solutions across Mill Creek, Snohomish, Bothell, Greystone, Birmingham, Chelsea, Vestavia Hills, and the surrounding areas.
Canopy Mortgage, LLC | 360 Technology Court, Suite 200 Lindon, UT 84042 | (877) 426-5500 | NMLS Consumer Access #:1359687. All loans subject to credit and property approval.