Mortgages as explained by the presidential candidates
It's September, and the 2016 election is right around the corner. And if you're like us, you might be tired of hearing about Hillary's email or Donald's wall.
But since the candidates and their debates seem to be all anyone can talk about these days (well, that and football), we decided to use the esteemed nominees to help you understand something that actually relates to your life: Mortgages (exciting, right?).
We've broken down some common mortgage products for you based on which candidate they most closely resemble, so that when you're ready to take that big step you'll be prepared. And let's be honest, now is the time. Mortgage rates are still historically low, people. Let's jump in:
(As in the one who says "stick with what you know.")
This much is true: Hillary is a familiar face, regardless of how you feel about her politics. And just like a vote for Hillz, home equity loans let you continue with what you know. Home equity loans allow homeowners to borrow money against the equity in an existing home. Generally available in a fixed-rate product or as a variable-interest line of credit, home equity loans and lines of credit are commonly used for remodeling, repairs or other big-ticket purchases. Fixed-rate home equity loans are delivered in lump sum to the borrower while home equity lines of credit can be drawn down and repaid in revolving fashion, more like a credit card. Just remember these mortgages will be based on your equity, plus debt-to-income ratio, reserves, income and credit scores.
(As in the one-percenter, and he knows you know it.)
Like the Donald himself, these mortgages aren't for everyone. Jumbo mortgage loans are used to purchase high-value homes that exceed the price limits on most traditional mortgages. Jumbos are needed when financing a purchase of more than $417,000 in most of the U.S., although in some higher-cost areas, jumbos start at $625,500. Most lenders require larger down payments, excellent credit scores and adequate reserves.
(As in the reformer; a harbinger of change.)
Gary Johnson is the third-party, sledgehammer-to-the-two-party-establishment choice. For home buyers who like the idea of tearing it down and renovating, check out the HomeStyle loan. Backed by Fannie Mae, the HomeStyle loan allows borrowers to use one loan to finance a home as well as planned remodeling and related improvements. Think fix that fixer-upper. In order to qualify, the borrower must share the plans for the renovations with his or her lender and be appraised for post-renovation market value.
(As in green grass and blue skies feels like home.)
Jill Stein keeps the environment at the center of her platform. You could say the same thing about USDA loans. We know USDA might conjure images of grade-A beef, but the Department of Agriculture actually supports this mortgage program as well. And just like supporters of the relatively unknown Green Party candidate, USDA loan recipients are a small group. That's because it's a pretty exclusive offer. Borrowers must be rural dwellers with average or below average incomes. Those who qualify get a pretty good deal: Up to 100 percent financing (that's code for no down payment) and discounted interest rates. Just remember, borrowers do pay a relatively small fee for mortgage insurance.
Election Day
Just like choosing a candidate before the polls open on Nov. 8, picking the right loan product for you requires research, time and dedication. A good mortgage lender can help you understand all the candidates for financing your dream — and there are plenty more options than what we've listed here. So, when you're ready to begin the process, contact a mortgage professional, and rest easy knowing, unlike the election, the choice of a loan product is (mostly) yours.
