Qualified Mortgages (QM) are the standard type of home loans that follow typical lending rules. Most common loans—like FHA, VA, Jumbo, Fannie Mae, and Freddie Mac loans—fall into this category.
Non-QM loans don’t follow these standard rules and often use alternative ways to verify income. These loans are helpful for borrowers who might not qualify for a traditional mortgage. At Brace Mortgage, we offer a variety of Non-QM options to help more people get approved for a home loan.
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Conventional loans are offered and backed by private financial institutions such as banks, credit unions, and mortgage lenders, as well as by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. To qualify, borrowers must complete a formal mortgage application and provide comprehensive documentation of their financial and credit profile, including a current credit score. Most conventional mortgages feature a fixed interest rate, ensuring consistent payments over the life of the loan. Because these loans are not insured or guaranteed by the federal government, lenders typically impose more stringent qualifications and underwriting standards.
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A Jumbo Loan is a mortgage that’s bigger than the maximum amount allowed by the government for standard loans. These loans aren’t supported by Fannie Mae or Freddie Mac, so lenders set tougher approval rules. Jumbo loans are usually used to buy luxury homes, investment properties, or houses in expensive areas. Because of their size, they often require a larger down payment, higher credit score, and lower debt-to-income ratio.
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FHA loans are home loans insured by the Federal Housing Administration. They make it easier for people to buy a home by allowing low down payments (as little as 3.5%) and more flexible rules for credit scores and debt levels compared to regular loans. However, FHA loans require you to pay mortgage insurance (MIP) for the entire loan term, and they can only be used to buy your primary residence, not an investment or vacation home.
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