Financing Options

Loan Type

The Benefits

The Details

Fixed–Rate Mortgage/ Conventional

With a fixed–rate mortgage, you'll always know what your monthly principal and interest payments will be. You can also lower your monthly payments by spreading them out over a long period of time.

Your interest rate is guaranteed to remain fixed for the length of the loan. The lower/shorter the term, the more you save in interest payments.

Adjustable–Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) also called a variable-rate or floating rate mortgage, is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.

Your interest rate is fixed for a period of time, and then converts to an adjustable rate, with periodic adjustments for the remaining term of the loan, based on a benchmark or index plus an additional spread or margin.

Jumbo Mortgage

Financing is available up to 85% of your home’s value with no mortgage insurance for a purchase or refinance with no cash back subject to property type, a required minimum credit score and a minimum amount of monthly reserves. Example: Loan amount up to $850,000 for a house that appraises for $1,000,000.

Jumbo mortgages are available when you need to finance amounts greater than conventional limits, up to $3 million on an eligible primary residence or second/vacation home, up to $1 million on an investment property.

FHA Mortgage

FHA mortgages offer down payments as low as 3.5%, which can include the use of gift funds. You do not need to meet low-to-moderate income requirements to qualify. Example: Down payment of $3,500 for a house that appraises for $100,000

An FHA Mortgage is a loan insured by the government. It can be used to purchase or refinance 1– to 4–unit properties dwellings up to a defined limit. Monthly mortgage insurance is required, as well as a mortgage insurance premium paid at closing.

Veterans Affairs (VA)

VA loans have low or no down payment options available and do not have a mortgage insurance requirement resulting in lower monthly payments compared to other options.

If you are a veteran or active-duty service member, or a member of the Guard or Reserve, you may be eligible for a VA loan. These can be used to purchase or refinance 1- to 4-unit dwellings.

Loan Options

Conforming Conventional

Non-Conforming Conventional (Jumbo)

FHA

VA Standard

Down Payment⁴

Minimum 3% down

Varies

Minimum 3.5% down

No money down for qualified borrowers for loan amounts below conforming loan limits

Program Fees(UFMIP², Guarantee Fee, Funding Fee, Etc.)

None

1.75% of loan amount

0 - 3.30% of loan amount

Minimum FICO Credit Score

620

Varies

640 with AUS approve/accept eligible and max debt-to-income ratio of 43%

Second Homes(Y/N)

Yes

Investment Property(Y/N)

Yes
Minimum 15% down

Yes

Multi-Family Home(2-4 UNITS) (Y/N)

Yes

Income Restrictions

Standard conventional loans do not have income limits; however, income limits on specialty programs may apply.

None

Max Seller Contributions

3% if LTV** > 90%
6% if LTV 75.01-90%
9% if LTV ≤ 75%
2% for investment properties

Varies

1. Maximum conforming loan limits change annually and are provided on a county by county basis at www.fhfa.gov
2. UFMIP – Up front Mortgage Insurance Premium
3. LTV – Loan-to-Value. Entries are separate and are not to be construed together as a guideline.
4. Example – 3% minimum down payment = $3,000 for a home with an appraised value of $100,000, loan amount = $97,000.Kirkpatrick Bank is not affiliated with the U. S. Government.