Home Loans
Home loans are not a one-size-fits-all situation. Understanding the different types of home loans can help borrowers choose the option that best fits their financial situations and long-term goals. With the right knowledge and preparation, obtaining a home loan can be a significant step toward achieving the dream of homeownership.
Find the Loan Option that Works for You
Conventional Loan
A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs). Down payment requirements may be as little as 3% for first-time homebuyers!
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FHA Loan
The FHA loan program offers mortgages with more lenient credit requirements, making homeownership more accessible to first-time buyers and those with less-than-perfect credit. These loans also provide competitive interest rates and flexible guidelines, ensuring broader access to financing options. Down payment requirement as little as 3.5%!
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VA Loan
VA loans, guaranteed by the U.S. Department of Veterans Affairs, offer military veterans and active-duty service members home loans with no down payment, competitive interest rates, and no private mortgage insurance (PMI) requirement. These benefits make VA loans an attractive and affordable option for eligible veterans and service members.
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USDA Loan
A USDA loan is a mortgage that the U.S. Department of Agriculture (USDA) administers to help low- and moderate-income households buy homes in eligible rural areas. They typically have less strict requirements for credit scores and down payments (as little as 0%), and don't require private mortgage insurance.
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NON-QM Loan
Non-QM loans, or Non-Qualified Mortgages, cater to borrowers who don't meet traditional lending criteria by offering flexible underwriting guidelines. Examples include bank statement loans for self-employed individuals, investor loans for property investors, and 1099 income loans for independent contractors and freelancers.
Seth Domazet, Managing Partner
NMLS# 190914
Contact
Mobile: 219-405-4519
Office: 219-728-2059
Email: seth@themortgageexchange.com
The Mortgage Exchange
About Us
At The Mortgage Exchange LLC, our goal is to be your lender for life. As one of Northwest Indiana’s premier home loan lenders, we understand that one of the most significant purchases someone will make will be their home. We strive to make that process as personal as possible. We know every buyer is different, and we have customized loan products to fit almost every situation. We work with the top investors in the country, so we never have to settle for one bank’s product line or rate. We guarantee a personalized experience for every loan situation.
A small lender with significant results.
Address
890 E Sidewalk Road
Chesterton, IN 46304
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The Home Loan Process
Pre-approval: This process will consist of verification of income, debts, & credit scores. Proof of income documentation will be requested. Pre-Approval Letter issued.
House Hunting: Your Rockstar Realtor will guide you through this process.
Under Contract: The mortgage process will begin once the following documents from all borrowers are received: Copy of the executed purchase agreement, income documents (varies based on individual) and drivers license. Other documentation could be requested.
Processing/underwriting: The processors will work on getting the loan through underwriting and compiling any additional documentation that is requested. Examples include: appraisal, title work, clarification on work history or bank statements, homeowner's insurance, letters of explanation, etc.
Appraisal: The appraisal is ordered by the lender through an independent 3rd party. It can be a longer aspect of the loan process. It is the only part of the closing costs that you pay before closing.
Clear to close: Once all processing/underwriting is completed and accepted by the investor, we will be issued a “clear to close.” This occurs after the closing disclosure and all documentation have been finalized and acknowledged by borrowers.
Closing: All borrowers should bring a photo ID and cash to close funds, if required. These funds will include down payment, closing costs, and escrows/prepaid costs (homeowners insurance & property taxes). Sign several documents and you’ll be a homeowner!
Monthly Loan Payment Breakdown
Your monthly mortgage payments are made up of several components. “PITI” or Principal, Interest, Taxes and Insurance are the four basic elements of a monthly mortgage payments*. Private Mortgage Insurance (PMI) and Homeowner’s Association (HOA) dues may also make up a portion of your total payment.
Principal: The Original balance of money loans, excluding interest. In addition, it is the remaining balance of the loan, excluding interest. Interest is calculated based on principal.
Interest: The charge, in dollars, for the use (loan) of the money. Your loan’s Closing Disclosure will contain a detailed breakdown of your loan’s interest costs.
Taxes: These vary by county and state. Generally, your local assessor determines your annual property taxes by determining the value of your home.
Hazard Insurance: Also called Homeowner’s insurance, this policy protects you from loss if your home is damaged by fire and other hazards. Ask your insurance agent about the different types of coverage available for your home. Hazard insurance payments may also be kept in an escrow account.
Private Mortgage Insurance (PMI): Generally, if your conventional loan’s down payment was less than 20% of the home’s purchase price, you’ll need to pay PMI. This is because loans with small down payments present increased risk to lenders. PMI protects the lender, not the borrower, if a borrower stops making payment on the loan. Ask me about the different methods available for you to make these payments.
Mortgage Insurance Premium (MIP): Federal Housing Administration (FHA) loans with low down payments charge a similar fee to PMI called a Mortgage Insurance Premium or MIP. Your annual MIP premium may be collected monthly as part of your payment, or may be included in your loan as an “upfront” MIP or UFMIP. Just like PMI, MIP protects the lend