Different Kinds of Mortgages - Fannie Mae, VA Loan, Freddie Mac, FHA Mortgage, Jumbo Mortgage

The two most frequently used types of mortgages are the FHA (Federal Housing Administration) Mortgage and the VA (Veterans Administration) Loan . Because the FHA mortgage and VA mortgage are guaranteed by the government, they usually feature lower mortgage refinancing rates and mortgage fees than other mortgages. Details about the most common kinds of mortgages, including the FHA mortgage and VA mortgage, follow.

Conventional Fannie Mae mortgage

Fannie Mae is a Fortune 20, shareholder-owned company with a public-spirited mission: to tear down barriers, lower costs, and increase home ownership. Fannie Mae is the nations largest source of funds for home mortgages. Before approving you, Fannie Mae looks at several of factors including credit ratings, debt you owe, and work history. Mortgages that are sanctioned via Fannie Mae should qualify for a better rate.

Freddie Mac

Freddie Mac is the common name for the Federal Home Loan Mortgage Corporation. The 2006 maximum loan amount for both Fannie Mae Mortgage and Freddie Mac company is $417,000. Freddie Mac does not issue mortgages directly, they buy mortgages from lenders and resell them as securities in the secondary mortgage market. Before approving you, Freddie Mac looks at a number of different components including credit scores, debt ratio, and employment history. Like Fannie Mae, Mortgages that are approved via Freddie Mac should get a better rate.

FHA Mortgage

An FHA mortgage (Federal Housing Administration) has some advantages over conventional mortgages. Since FHA Mortgages are guaranteed by the government, they typically have easier prerequisites, lower down-payment requisites, and they are assumable mortgages. The maximum mortgage amount for an FHA mortgage (single-family) varies depending on the city where you live. You can contact a mortgage expert for these maximum amounts for your specific city. Government mortgages (including the FHA mortgage) make up 20 percent of home mortgages in the U.S.

VA Loan

A VA (Veterans Administration) mortgage carries several of the same benefits as an FHA residential mortgage. However, to qualify for this mortgage, you must be a qualifying veteran, the unmarried widow of a veteran, a Public Health Service Officer, or an active-duty serviceman. The maximum mortgage amount for a VA-guaranteed mortgage is $417,000. However, if you can make a large payment, you may qualify for $450,000. This is called a "Jumbo" loan. . No down payment is required for most mortgages below $417,000. A mortgage specialist can help you with more information.

Non-Conforming mortgages

Jumbo mortgage

A jumbo mortgage is a mortgage with a loan amount above conventional loan limits. Jumbo mortgages apply when agency (FNMA and FHLMC) limits don't cover the full loan amount. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that acquire the bulk of home mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage they will purchase from an single lender. As of 2006, the limit is $417,000, or $625,500 in Alaska, Hawaii and the U.S. Virgin Islands. This leaves a portion of the market to look elsewhere for placement. Other large investors, such as banks, step in to fill the need with maximum mortgage amounts going to the $1 million or $2 million range. The average rate are typically greater than normal for conforming mortgages, and vary depending on property types and mortgage amount.

Bad Credit mortgage

If you've had credit troubles before lenders consider you a higher risk borrower. In such cases, the credit determination includes things beyond credit scores and your credit history, often including job, earnings, assets and other factors as considerations.

A mortgage company can help you find the best rate from various lenders for Freddie Mac Mortgage as well as Fannie Mae mortgages. They can help you learn if you are eligible for other governemt backed loans.

Dan Palmer runs a mortgage information website. Find about the latest information on mortgages here: www.mortgageinformation.ws

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Bob O'Toole
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