Open the door to homeownership with a loan that works best for you

A bank statement loan is a creative loan program that requires borrowers to provide the last 12 months’ bank statements instead of tax returns. Lenders will use a percentage of the average monthly deposits as the monthly income on the loan application to qualify for the mortgage. Bank statement loans are the most common mortgage used by self-employed borrowers today.

With a bank statement loan you are going to qualify based upon the 12-24 month bank deposits (depending upon the lender) into your personal and/or business accounts. The bank statement lenders want to see a consistent flow of money sufficient to qualify you for the bank statement mortgage. These loans are for self-employed borrowers who typically have substantial tax write-offs that make it challenging to demonstrate the necessary income to prove their ability to repay the loan. Getting approved for a mortgage is much easier for self-employed borrowers now that bank statement loans are available.

A conventional mortgage is one that’s not guaranteed or insured by the federal government. Instead, they are available through private lenders, such as banks, credit unions, and mortgage companies.

Conventional mortgages have a fixed rate of interest, which means that the interest rate does not change throughout the life of the loan. This gives San Diego homebuyers a sense of stability that is not present in the case of, say, an adjustable-rate mortgage. Interest rates for conventional loans tend to be lower than rates for FHA loans yet higher than those of VA loans.

Conforming conventional loans must fall within the limits set by Fannie Mae and Freddie Mac. As of 2021, the limit is $548,250. If the loan surpasses that limit, it becomes a jumbo (non-conforming) loan. Usually, you’ll be able to borrow more money on a conventional loan than on an FHA loan.

If your credit score is in good shape and you can afford to make the required down payment, then a conventional mortgage might be the right choice for you. If not, consider getting a government-insured mortgage instead.

An FHA Streamline Refinance is a type of FHA-to-FHA refinance. It doesn’t require an appraisal (the FHA already has one on file), the documentation requirements are limited, and you might not need a credit check, either.

There are two types of FHA streamline refinance options:

1. Credit qualifying: This means a credit check is required. An FHA streamline refinance is only “credit-qualifying” when it increases your mortgage payment at least 20%, you’ve had the loan less than six months, or you’re removing or adding a borrower to the loan.
2. Non-credit qualifying: Most FHA streamline refinances reduce your rate or payment. For loans that fall into this category, no credit check is required.

Most streamline refinances do come with closing costs, though some lenders may offer no-cost options. In these scenarios the lender will pay the closing costs and the borrower will pay a higher interest rate to make up for it. As with any loan program, you (and your loan) will have to meet certain requirements to qualify for an FHA streamline refinance. FHA streamline refinances can be a smart way to lower your interest rate and reduce your monthly payment easily and without hassle.

The VA loan program helps veterans buy and refinance homes with more favorable loan terms than those found in the open mortgage marketplace. If you are a veteran with a mortgage on a home that’s your primary residence or that you previously occupied, and you want to refinance, a VA refinance may be the best option.

Why go with a VA refinance? A VA refinance offers significant advantages. Because the VA’s insurance guaranty essentially sets up a financial safety net for the VA lender, a lender can pass more advantageous loan terms along to you, the veteran. If you’ve financed a home purchase with a VA loan before, you probably already know about some of these advantages. You receive the same benefits in a VA refinance, including limits on closing costs, no-prepayment penalty, and no private mortgage insurance requirement even if your down payment is less than 20 percent.

The VA Cash-out and Rate & Term refinance can help you address personal financial dilemmas that other VA refinance types cannot solve. The VA IRRRL mortgage is a smart option because the refinance process is a rather seamless experience. A VA IRRRL refinance not only uses your original entitlement, but it also authorizes lenders to close IRRRL loans as a matter of routine. Also, a VA IRRRL refinance almost always lowers your interest rate, which provides a great way to reduce your monthly outlay with little effort.

If your lender requires you to have mortgage insurance, you may have to weigh your options to determine which is best for your financial situation. Some lenders will offer to pay the mortgage insurance for you. This seems like a generous offer, but nothing in life or lending is free. If your lender pays for your mortgage insurance instead of you (Lender-Paid Mortgage Insurance), you’ll still pay the price in the form of a higher mortgage interest rate. Because the cost of insurance is spread over the life of the loan, however, your monthly mortgage payments won’t increase much. This can make affording your mortgage easier – your lender will allow you to make a smaller down payment without jacking up your monthly payment.

This sounds like a good deal, and for some borrowers, it is. The catch, however, is that you won’t have the option of canceling your mortgage insurance, no matter how much equity you have in your home. You’ll keep paying the higher interest rate until you satisfy the loan or refinance. This option works well for some and is great for those who need the mortgage interest deduction on their taxes.