What Is the Difference Between a Primary Mortgage and a Secondary Mortgage?

When it comes to financing the purchase price of a home, one important concept home buyers need to remember is there are many different types of home loans to choose from, based upon your financial situation, including your credit history and the amount of the down payment you have available.

Primary Mortgage Lenders

A primary mortgage is essentially a mortgage you obtain through your local bank or credit union. The type of loan programs offered is usually limited to a few conventional fixed rate loans and maybe a single ARM (adjustable rate mortgage) program. The downside to primary mortgages is they can require a larger down payment, ranging from 10 to 20 percent of the purchase price, which does not include closing costs.

Secondary Mortgage Lenders

The best example of a secondary mortgage lender is a mortgage broker who works with numerous lenders offering a wide range of loan programs, like we do, here at Elite Financial. Loan program options can include:

  • VA
  • FHA
  • First-Time Buyers
  • USDA
  • ARM, and More!

The key benefit of working with a secondary mortgage lender is you have more flexibility with a wider range of loan programs. As such, your down payment tends to be much lower and ranges from as little as 0 percent with VA and FHA, to around 10 percent for many programs.

Plus, there are programs for home buyers who have had credit problems in the past. To learn more about our available mortgage loan programs, please feel free to contact Elite Financial at 805-494.9930 today!