SMI Lending Loan Types

Loan Types

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Standard Conventional

Conventional mortgages are your traditional loans, offering both fixed and adjustable rate products. For those looking to purchase a new property, conventional mortgages allow buyers a minimum down payment option as low as 3% with loan amounts not to exceed the conforming limit of $424,100.

Fixed rate terms include 30-Year, 25-Year, 20-Year, 15-Year, and 10-Year notes. Fixed rate loans are better suited for clients who intend to stay in a property long term or for those who prefer the peace of mind of being locked into a low rate over the life of the loan.

Adjustable rates include 5/1 ARMS and 7/1 ARMS, respectively. A 5/1 ARM is fixed for the first five years of the term, and will then adjust at month 60. A 7/1 ARM will adjust at month 84. Adjustable rates are favored by buyers who prefer a lower interest rate up front because they intend to pay the mortgage off sooner or they plan to sell/refinance the property before the initial adjustment.

  • Primary, Second homes, and Investment properties
  • Debt ratio maximum is 45% with automated approval
  • Minimum 3% down payment for primary residences
  • Second homes with 10% down and Investment properties with 15% down

FHA Loans

FHA is another option to consider for home buyers looking for a lower down payment or those with limited credit history. FHA stands for Federal Housing Administration, and this loan is insured by the Department of Housing and Urban Development (HUD). Although these loans have increased in popularity in recent years, there are important pros and cons that a buyer will want to consider before deciding to go with an FHA mortgage. The benefits of using an FHA loan include a minimum down payment of 3.5% and approvals with credit scores as low as 580.

  • Debt ratio maximum is 55% with automated approval
  • Buyer can use gift funds toward down payment
  • Primary residences only in Texas
  • Seller concessions up to 6%
  • County specific loan caps (generally $275,665)
  • Dallas and Tarrant can go as high as $362,250
  • Non-occupying co-borrowers may cosign
  • Manual Underwriter options available

VA Loans

A VA loan is a mortgage guaranteed by the United States Dept. of Veteran Affairs (VA). Not only does the mortgage provide a competitive rate compared to conventional loans, but it is one of the only programs that does not require either a down payment or monthly mortgage insurance.

For existing home owners looking to refinance, VA offers a streamline IRRL loans (Interest Rate Reduction Refinancing Loan) that allow limited paperwork, such as no appraisal, no credit score and no income verification.

In order to qualify for a VA Loan, a veteran must have served 181 days during peacetime, 90 days during war time, or six years in the Reserves or National Guard. You may also qualify as the spouse of a service member under certain circumstances.

  • VA Funding Fee for first time and subsequent uses
  • Jumbo loans available
  • Seller concessions up to 8%
  • Primary residences only in Texas

Jumbo Loans

Jumbo loans are reserved for buyers looking to secure a loan amount above the conforming loan limit of $424,100. Recognized as a non-conforming loan, most underwriting guidelines require a 20% down payment with a 720 credit score.

Equity Loans

Home equity loans are great options for existing home owners looking to take cash out for renovations, debt consolidation, or even a family emergency. The state of Texas allows owners of primary residences to tap into their equity up to 80% of the value of their home. Depending on your personal situation, we will discuss the benefits of refinancing to ensure that it is a good decision for you and your family.

  • Approvals as low as 620
  • 75% LTV cap on second homes
  • Closing costs for cash out primary refinances cannot exceed 3% of the loan amount