Financing, Mortgages, and Lender Requirements
Loan programs
Conventional loans are not government insured; FHA loans permit low down payments with mortgage insurance premiums; VA loans are guaranteed by the Department of Veterans Affairs, typically require no down payment, and carry a funding fee; USDA loans target rural areas; jumbo loans exceed conforming limits. Know that a VA loan is a guaranty, not an insurance policy, and that FHA mortgage insurance commonly lasts for the life of the loan when the down payment is small.
Disclosures and consumer protection
Under the integrated disclosure rules, the Loan Estimate must be delivered within three business days of application, and the Closing Disclosure at least three business days before consummation. Rescission (three business days) applies to refinances and home equity lines on a principal residence-not to purchase loans. RESPA prohibits fees for referrals; affiliated business arrangements require written disclosure. Escrow accounts may hold a cushion of no more than one-sixth of annual disbursements. Under the Homeowners Protection Act, borrower-requested PMI cancellation is available at 80% loan-to-value and automatic termination at 78%.
Virginia overlay
Mortgage loan originators must be licensed and registered through NMLS under Virginia's mortgage licensing statute; appraiser and lender independence rules prohibit coercion.
Traps
Swapping Loan Estimate and Closing Disclosure timing; applying the three-day rescission to a purchase; confusing discount points with origination fees; assuming preapproval guarantees a loan.
Rule of thumb
3–3–3: estimate in three days, closing disclosure three days before, rescission three days after-and rescission never applies to a purchase.