Loan Programs

There was once a time when the only place you could go to get a loan was your neighborhood bank. And then everything had to be perfect: perfect credit, the perfect income, the perfect debt ratio, the perfect amount of money to put down.

Thankfully, times have changed; today there are more loan programs than anyone could have imagined even ten years ago. Unfortunately not many people know about all of the options they have available to them. The following is a list of some of the different loan programs that are currently in the market. If you have any questions about any of the programs mentioned below contact a mortgage broker or lender such as LHA Mortgage Services for more details.

To Be Conventional, Or Not To Be Conventional

The first distinction that should be made before we move into actual programs is the difference between a conventional loan, and a non-conventional loan.

A conventional loan, also known as prime, is exactly what it sounds like. It's the "I've got all my ducks in a line" loan. When you go into your local bank and apply for a mortgage, you are applying for a conventional loan. But don't think just because you aren't the perfect candidate you can't get a prime loan. Times have changed, and so have the banks. Many banks are offering programs for Zero Down loans, Stated Income Loans, and many more scenarios that you wouldn't normally associate with a bank.

So now you have to ask the question, if I can get a loan from the bank with Zero down, why should I come to you, a mortgage broker? That is actually a very simple question to answer. Because brokers like LHA Mortgage Services can shop all of the banks for you! Every bank's loan programs are slightly different. When a broker shops around for his client he can actually match the best loan program for his client's particular needs, and get the best rates available.

Now back to the topic at hand...

A non-conventional loan, also know as sub-prime, has greater exceptions than a conventional loan. Lower credit scores, higher debt ratios, less money down, being late on rent or mortgage payments: these are all situations where a bank might have denied an application. But a sub-prime lender will allow some, if not all of these exceptions, and still give an approval to a loan application. Sub-prime lenders have opened the door to people who might never have been able to own a home in the past.

So What Loan Is Right For You...

Whether you go conventional or non-conventional, there are a variety of loan programs available to meet almost every person's needs. Following are just a small sampling of what is available in the market. For full details and a loan tailored to meet your particular situation, call a mortgage broker like LHA Mortgage Services who will be able to guide you.

Full Documentation : This is your most typical loan scenario. With a full doc loan you "fully" disclose your financial situation. This usually includes your last 2 years W-2's, last 2 months pay stubs and bank statements, and being in the same line of work for a minimum of 2 years. Full doc loans are common to both conventional and non-conventional lending, the main difference being non-convention lenders will allow you to have more debt (credit card bills, car payments, etc) and still qualify for a loan. Full doc loans will usually give you the best rates available.

Stated Income : Stated loans are similar to full doc with the exception that you are "stating" your income. You're still going to need 2 years in the same line of work, but you aren't going to be showing your pay stubs. Now don't start thinking about that "extra large" house just yet, a stated loan has to make sense to the lender. You can't be an assistant manager at the mall and "state" an income of $250,000 a year. Stated loans are perfect for people who are self-employed and people whose income varies throughout the year. You won't get full doc rates, but you will still get a very competitive rate.

No Income/No Asset : Also known as a "NiNa" loan, all you are going to be showing if you go with this program is that you've had a job for 2 years. You won't put any income on your application (and therefore you won't have a debt ratio), and you won't be showing any of your bank accounts. With a NiNa you are going to have higher rates than stated and full doc loans, and you will probably have to have a bigger down payment.

No Documentation : Also know as a "no doc" loan, you are providing the least amount of information about yourself to the lender. A no doc loan won't show your employment history and is generally quicker to close than other loan types due to there being very little to verify about you. As a consequence, you won't find a Zero down no doc loan, and you will usually need good to excellent credit to qualify. No doc loans usually have higher interest rates than the other programs mentioned above. Still, if you don't want to show your income, or you don't have 2 years on the job, a no doc loan is generally the best way to go.

These loan programs are just the tip of the iceberg. With so many lenders, all with their own niches, there are a variety of ways to get a loan approved. The following is just a small sample of what is available:

- No Credit Loans
- 12 Months Bank Statements
- Loans 1 Day Out Of Bankruptcy
- Foreign Nationals/Resident Aliens
- Interest Only Loans
- Construction/Lot Loans
- Hard Equity