Any mortgage that is not insured or guaranteed by the federal government is considered to be a conventional loan.  Conventional loans may be conforming or nonconforming.  Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. Nonconforming loans are described as loans in which the terms are underwritten based on guidelines that differ from lender to lender in which the loan amount, the loan to value ratio, the terms, or some other aspect of the loan exceeds permissible limits as specified   Currently, the conforming loan limit for a single family residence is $417,000. 

A jumbo mortgage is a loan product that provides financing for those who are purchasing or refinancing a property that exceeds the current maximum conforming loan amount.  A jumbo mortgage will carry a slightly higher interest rate than a conforming conventional mortgage. 

The greatest benefit of the 80/20 loan product is that you avoid paying mortgage insurance.  You do this by receiving a 1^st mortgage at 80% of the purchase price and a 2^nd mortgage (piggyback) for the remaining 20% of the purchase price.

The 1^st mortgage can be a fixed rate, adjustable rate or an interest only loan.  The 2^nd mortgage can be a home equity line of credit that changes with the prime rate or a closed end loan with a fixed or adjustable rate option.

If you have a strong credit profile but limited funds to contribute towards a down payment, then 100 % financing is right for you.  The main advantage of this type of loan is the ability to buy a home with almost no money down.  These government backed loans include Montana Board of Housing, Rural Developement and VA.

Non-Conventional loans are offered to borrowers that have credit issues that fall below standard confroming guidelines.  Borrowers may have recently filed for bankruptcy, been foreclosed upon, or have had repeated late payments and collections.  All of which have a negitive impact on credit scores.   The purpose is to offer temporary financing to applicants until they can qualify for conforming financing.  The interest rates and programs vary, based upon many factors of the borrower's financial situation and credit history.

An interest only loan allows a borrower the option of paying just the interest portion of the mortgage payment, instead of principal and interest.  The borrower reaps the benefit of lowering his/her monthly payment, while still having the ability to make principal payments in addition to their required monthly interest payment.  Interest-only loans can be fixed rate or adjustable rate mortgages.  The interest only option is available for a portion of the term, followed by a fully amortized period.  For example, on a 30 year fixed interest only option, you would pay the first 15 years of the note at the interest only payment, followed by the remaining 15 years at the fully amortized payment.

The Rural Development guarantee program provides loans for homebuyers in rural areas.  This program does not require a downpayment.  It is a 30 year fixed rate program with no mortgage insurance.  It is available for borrowers with flexible credit.  There is a required guarantee fee that may be rolled into the loan amount.  Income restrictions do apply. 

American Mortgage of Montana, Inc. is proud to offer VA Loans to our veterans.  These loans are available for the benefit of eligible veterans of the armed services, active-duty personnel, reservists, and their spouses.  VA loans allow for relaxed qualifying requirements, including no down payment for qualified borrowers.  With a VA loan, you are required to pay a funding fee which may be financed in whole or in part in the mortgage you receive.  Applying for a VA loan is not much different then applying for a conventional mortgage, although you will be required to submit your certificate of eligibility to document the guaranty or insurance benefit available to you.  Purchase and refinance loans are available through the VA loan program.