Purchase
Who it may suit
First-time buyers, move-up buyers, and anyone buying a primary home in Texas or Florida.
What lenders may ask for
- Income a lender can verify, usually pay stubs and W-2s, or tax returns and business records if you work for yourself.
- A credit history the lender reviews. There is no single cut-off: it moves with the program and with the lender.
- A down payment, which differs by program. A smaller one is often possible, and usually brings mortgage insurance with it.
- Funds for closing costs, which are separate from the down payment and are itemised for you before you commit.
- A property that appraises at or above the agreed price.
Potential benefits
- Options compared across multiple wholesale lenders, rather than one bank's shelf of products.
- Conventional and government-backed loans set side by side, so you can see what each means for your monthly cost.
- A written comparison of rate, cost and terms before anything is signed.
Considerations
- A smaller down payment usually means mortgage insurance, which adds to what you pay each month.
- A lower rate often costs points paid at closing. Whether that pays off depends on how long you keep the loan.
- A pre-qualification is not an approval. A lender reviews the full file, and the answer is theirs to give.
Read the full guideDiscuss this programRefinance
Who it may suit
Homeowners who want a different rate or term, or who want to draw on the equity they have built.
What lenders may ask for
- Details of the mortgage you hold now, including the balance, the rate and how long is left to run.
- Equity in the property. How much you need depends on the program and on whether you are taking cash out.
- Income a lender can verify, and a credit history the lender reviews, much as with a purchase.
- An appraisal in most cases, so the lender can establish the property's current value.
Potential benefits
- A rate-and-term refinance can change what you pay each month, or how long you pay it for.
- A cash-out refinance draws on equity you have already built, for a purpose you choose.
- The same comparison across multiple wholesale lenders, so the new loan is not simply the one your current servicer offers.
Considerations
- Refinancing has closing costs. We work out how many months it takes for the monthly change to cover them, and whether you are likely to still hold the loan by then.
- Starting a new thirty year term after several years of payments can raise the total interest you pay, even when the monthly figure falls.
- A cash-out refinance increases what you owe against the property.
- Refinancing may reduce your payment, subject to review. Nothing is certain until a lender has assessed your file.
Read the full guideDiscuss this programConventional loan
Who it may suit
Buyers and homeowners with steady, documented income and a good credit history.
What lenders may ask for
- Income a lender can verify, and a credit history reviewed against the program's guidelines. Credit counts for more in the pricing than it does on an FHA loan.
- A down payment. A smaller one is possible, and below a set level it brings private mortgage insurance with it.
- Funds for closing costs and, on some loans, reserves left over after closing.
- A loan amount within the conforming limit for the county. Above that limit, the loan is a jumbo.
- An appraisal confirming the property's value.
Potential benefits
- Private mortgage insurance can usually be removed once you have built enough equity, unlike the mortgage insurance on most FHA loans.
- It can be used for a primary home, a second home or an investment property.
- With good credit it is often the most cost-effective option, and we set it beside FHA and VA so you can see whether it is.
Considerations
- Credit history counts for more in the pricing than on a government-backed loan, so a lower score can cost noticeably more.
- Private mortgage insurance adds to the monthly cost until it comes off.
- Guidelines on debt, credit and documentation can be stricter than FHA's.
Read the full guideDiscuss this programFHA loan
Who it may suit
Buyers with a smaller down payment saved, or a shorter or imperfect credit history.
What lenders may ask for
- A lender approved to originate FHA loans. Fedrate Mortgage is a broker: we place your file with one of them.
- A credit history the lender reviews against FHA guidance, which is generally broader than a conventional loan allows.
- A down payment, which for FHA is typically lower than a conventional loan asks for.
- A property that meets the condition standards FHA sets, established by an FHA appraisal.
- Mortgage insurance, which applies to every FHA loan.
Potential benefits
- A route to a mortgage when the down payment saved is smaller, or the credit history is shorter or imperfect.
- Guidance on FHA, VA and conventional loan options side by side, so an FHA loan is chosen because it fits and not by default.
Considerations
- FHA mortgage insurance is charged both at closing and annually, and on most FHA loans it stays for the life of the loan unless the loan is refinanced.
- The property has to meet FHA condition standards, which can rule out a home that needs significant work.
- FHA sets a maximum loan amount that varies by county, so a higher priced home may need a different program.
- Fedrate Mortgage is not affiliated with, nor acting on behalf of, the Federal Housing Administration or any other government agency.
Read the full guideDiscuss this programVA loan
Who it may suit
Eligible veterans, active service members, and surviving spouses.
What lenders may ask for
- A Certificate of Eligibility, which establishes your entitlement. We can talk you through obtaining one.
- Qualifying service as a veteran, an active service member, or an eligible surviving spouse.
- Income a lender can verify and a credit history the lender reviews, as with any mortgage.
- A property that meets the Department of Veterans Affairs minimum property requirements, established by a VA appraisal.
Potential benefits
- Eligible borrowers may be able to buy with no down payment at all.
- There is no monthly mortgage insurance on a VA loan, which is the cost that usually comes with a small down payment elsewhere.
- The entitlement can often be used more than once across a lifetime.
Considerations
- Most VA loans carry a funding fee, charged at closing. The amount varies with your circumstances, and some borrowers, including many with a service connected disability, are exempt.
- The property must meet the minimum property requirements, which can rule out a home in poor condition.
- Buying with nothing down means starting with little equity, which matters if you need to sell early.
- Fedrate Mortgage is not affiliated with, nor acting on behalf of, the Department of Veterans Affairs or any other government agency.
Read the full guideDiscuss this programUSDA loan
Who it may suit
Buyers of a primary home in an eligible rural or suburban area, with household income within the program's limit.
What lenders may ask for
- A property in an area the program designates as eligible. Many are on the edges of towns and cities, not only in open country.
- Household income within the program's limit for the county and the size of the household. It counts everyone in the household, not only the borrowers.
- The home as your primary residence.
- Income a lender can verify, and a credit history the lender reviews.
- A property that meets the program's standards, established by an appraisal.
Potential benefits
- Eligible buyers may be able to buy with no down payment.
- The upfront fee can usually be added to the loan rather than paid at closing.
- A route to owning a home in areas many buyers do not realise qualify.
Considerations
- The program charges an upfront fee and an annual fee, which work much like mortgage insurance.
- Household income has a ceiling, so a higher-earning household may not qualify.
- The home must be in an eligible area, and the eligibility maps are revised from time to time.
- It is for a primary residence only, not a second home or an investment.
- Fedrate Mortgage is not affiliated with, nor acting on behalf of, the United States Department of Agriculture or any other government agency.
Read the full guideDiscuss this programJumbo loan
Who it may suit
Buyers and homeowners borrowing more than the conforming limit for their county.
What lenders may ask for
- A strong credit history. Lenders set their own standards for jumbo loans, and they are usually stricter than for a conforming loan.
- A larger down payment than most conventional loans ask for.
- Cash reserves left after closing, usually more than for a smaller loan.
- Full documentation of income and assets.
- An appraisal, and with some lenders a second one.
Potential benefits
- Finance for a higher-priced home in one loan, rather than a first mortgage with a second loan on top.
- Terms that differ widely from lender to lender, which is exactly where comparing across wholesale lenders is worth doing.
- Available for primary homes, second homes and, with some lenders, investment property.
Considerations
- Qualifying is stricter: credit, reserves and documentation are all looked at more closely.
- The conforming limit is set by county and changes each year, so whether a loan counts as jumbo depends on where and when you borrow.
- The appraisal is scrutinised closely, and a low valuation affects a large loan more.
Read the full guideDiscuss this programInvestment property
Who it may suit
Investors buying or refinancing a rental home or a building of up to four units.
What lenders may ask for
- A larger down payment than on a home you live in.
- Cash reserves after closing, measured in months of payments.
- Income a lender can verify. With some lenders, the property's rent can carry the loan instead of your personal income.
- Leases, or a rent estimate from the appraiser, so the lender can see what the property earns.
- A credit history the lender reviews.
Potential benefits
- Conventional loans and loans qualified on rent, compared side by side.
- Qualifying on the property's rent can help an investor whose personal income, on paper, tells only part of the story.
- Financing for single houses and small buildings of up to four units alike.
Considerations
- Rates are usually higher than for a home you live in.
- Loans qualified on rent often cost more again, and some carry a prepayment penalty.
- Vacancies and repairs are yours to cover, and the payments are due regardless.
- A building of five or more units is a commercial loan, set out on the commercial loans page.
Read the full guideDiscuss this programSelf-employed borrowers
Who it may suit
Business owners, freelancers and contractors whose tax returns do not show the full picture of what they earn.
What lenders may ask for
- An established record of self-employment.
- Business or personal bank statements, or a profit and loss statement, depending on the lender.
- A larger down payment than a conventional loan usually asks for.
- A credit history the lender reviews.
- Evidence the business is active, such as a business licence or a letter from your accountant.
Potential benefits
- A way to qualify on what the business actually brings in, rather than the figure left after deductions.
- We check first whether a conventional loan works on your returns, because it usually costs less.
- Available for primary homes, second homes and investment property, depending on the lender.
Considerations
- Rates and fees are usually higher than on a conventional loan.
- These loans sit outside the standard guidelines, so terms vary widely from lender to lender.
- Some carry a prepayment penalty.
- They fall outside the qualified mortgage rules that most home loans follow, so read the terms closely and ask us about anything unclear.
Read the full guideDiscuss this programHome equity loans and HELOCs
Who it may suit
Homeowners who want to borrow against their equity and keep their current first mortgage.
What lenders may ask for
- Equity in the home. The lender caps how much of the home's value can be borrowed across both loans together.
- Income a lender can verify, and a credit history the lender reviews.
- An appraisal or another valuation of the property.
- Details of the mortgage you hold now.
Potential benefits
- Your first mortgage, and its rate, stay as they are.
- A line of credit charges interest only on what you have drawn.
- Closing costs are often lower than on a cash-out refinance.
Considerations
- Your home secures the loan, so falling behind puts the home at risk.
- A line of credit usually has a variable rate, so the payment can rise.
- Rates are usually higher than on a first mortgage.
- A line of credit has a period for drawing and then a period for repaying, and the payment can rise sharply when the second begins.
- Texas sets its own rules for borrowing against a home you live in, including how much can be borrowed and how often. We explain how they apply before you commit.
Read the full guideDiscuss this programConstruction and renovation
Who it may suit
Buyers building a new home, and owners buying or keeping a home that needs significant work.
What lenders may ask for
- Plans, a detailed budget and a signed contract with a qualified, insured builder or contractor the lender approves.
- An appraisal based on what the home will be worth once the work is finished.
- Income a lender can verify, and a credit history the lender reviews.
- A down payment, and funds set aside for costs that run over budget.
Potential benefits
- One loan can cover the land or the home and the work together, instead of separate finance for each.
- A construction-to-permanent loan closes once and becomes an ordinary mortgage when the build is complete.
- Renovation versions exist within FHA and conventional programs, so repairs can be financed with the home itself.
Considerations
- Money is released in stages after inspections, so the builder's schedule and the lender's have to line up.
- Costs and timelines often run over. Lenders want a contingency, and delays can cost you.
- Rates and fees are usually higher while the home is being built.
- The builder or contractor has to be approved by the lender, which can rule some out.
Read the full guideDiscuss this programReverse mortgage
Who it may suit
Older homeowners with substantial equity who want to draw on it and stay in their home.
What lenders may ask for
- A borrower who meets the program's minimum age. Most reverse mortgages are Home Equity Conversion Mortgages, insured by the Federal Housing Administration, which sets that age. Some private reverse mortgages set their own.
- For a Home Equity Conversion Mortgage, a session with an independent counsellor approved by the Department of Housing and Urban Development before you apply. It is required, and it is there to protect you.
- The home as your primary residence, with substantial equity in it.
- A financial assessment showing you can keep paying property tax, homeowners insurance and any association dues.
- A property that meets the program's standards, established by an appraisal.
Potential benefits
- Cash from your equity as a lump sum, a line of credit, regular monthly amounts, or a combination, depending on the loan.
- No monthly principal and interest payment while you live in the home and keep to the loan's terms.
- The home stays in your name.
- A Home Equity Conversion Mortgage is non-recourse: when the home is sold to repay it, the amount owed is generally limited to what the home is worth.
Considerations
- The balance grows every month as interest and mortgage insurance are added, so the equity left for you or your heirs shrinks.
- Property tax, homeowners insurance and upkeep remain yours to pay. Falling behind on them can make the loan due, and can lead to losing the home.
- The loan becomes due when the last borrower sells, moves out for good, or dies. A spouse who is not a borrower on the loan should understand exactly where that leaves them.
- Upfront costs are usually higher than on an ordinary mortgage, including mortgage insurance on a Home Equity Conversion Mortgage.
- Texas sets its own rules for reverse mortgages on a homestead, and we explain how they apply before you commit.
- Fedrate Mortgage is not affiliated with, nor acting on behalf of, the Federal Housing Administration, the Department of Housing and Urban Development, or any other government agency.
Read the full guideDiscuss this programCommercial loans
Who it may suit
Business owners and investors buying, refinancing or building commercial property, including apartment buildings of five or more units.
What lenders may ask for
- Financial statements and tax returns for the business, and usually for each owner too.
- For a property that earns income, the rent roll, leases and operating statements, so the lender can set what it earns against what it costs.
- An appraisal, and often environmental and property condition reports.
- A larger down payment than most home loans ask for, and cash reserves.
- Owners who sign for the loan personally, which many commercial lenders require.
Potential benefits
- Commercial lenders, SBA-backed programs and short-term finance compared side by side, rather than the one product a single bank offers.
- A loan sized on what the property earns, which can suit an investor whose personal income tells only part of the story.
- Guidance on the structure as well as the rate: the term, the repayment schedule, prepayment terms, and when the loan would need refinancing.
Considerations
- Many commercial loans have a shorter term than the schedule they are repaid on, leaving a balance due at the end that has to be refinanced or paid off.
- Many carry prepayment penalties, so paying off or refinancing early can cost more than expected.
- Rates are often variable, or reset after a set period, so the payment can change.
- Commercial loans are made for business purposes and do not carry all the consumer protections that apply to a home loan. Read the terms closely, and ask us about anything unclear.
- Fedrate Mortgage is not affiliated with, nor acting on behalf of, the Small Business Administration or any other government agency.
Read the full guideDiscuss this program