| Loan Programs |
The Good |
Items To Consider |
 |
| Fixed Rate Mortgages | top^ |
40 year fixed
30 year fixed
15 year fixed
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- Monthly payments are fixed over the life of the loan
- Interest rate does not change
- Protected if rates go up
- Can refinance if rates go down
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- Rate does not drop if interest rates improve
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| Adjustable Rate Mortgages | top^ |
10/1 ARM
7/1 ARM
3/1 ARM
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- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
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- More risk
- Payments may change over time
- Potential for high payments if rates go up
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| Balloon Mortgages | top^ |
7 year
5 year |
- Lower initial monthly payment
- Lower payment over a shorter period of time
- Many balloon mortgages offer the option to convert to a new loan after the initial term.
|
- Risk of rates being higher at the end of the initial fixed period
- Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
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| VA Mortgages | top^ |
| |
- Do not require a down payment, unless the purchase price is more than the appraised value or in excess of $240,000.
- Negotiable fixed interest rate that is competitive with conventional mortgage financing.
- Limitations on which closing costs may be assessed to the veteran.
- May be prepaid without penalty.
- May have forbearance extended to worthy VA homeowners experiencing temporary financial difficulty
- Do not require mortgage insurance premiums.
- The seller may pay ALL of the veteran's closing costs
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- VA home loans require the veteran (or the seller) to pay a funding fee.
- Higher loan amounts reduce the available equity position of the veteran.
- Co-borrowers are restricted to qualifying veterans and spouses of qualifying veterans only.
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| FHA Mortgages | top^ |
| |
- Lenders look more favorably at the terms since the government is backing up the loans.
- Down payment as low as 3.5%
- Sellers are allowed to pay up to 6% of the purchase price to cover the closing costs.
- Allows for non-owner occupied co-borrowers on the loan, with no penalty.
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- Upfront premium of 1.75% (can be financed) and 0.55% monthly premium on loans > 95% LTV.
|
| Interest-Only (IO) Mortgages | top^ |
| |
- People who expect to make a lot more money in the near future.
- People who's income takes the form of infrequent bonuses or commissions and will use those bonuses and commissions to pay down principal.
- Practiced investors who are confident that the money that would be applied to principal payments, will instead be used for investments that will return a higher rate than the property's equity growth.
- Allows for more interest to be deducted from tax liability(if applicable) each year.
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- If property value decreases dramatically, borrower could end up having difficulty selling or refinancing the property.
- Adjustable rate IO mortgages present more of a risk if rates climb.
- Many people will not invest the money saved nor pay extra money toward principal payments.
- Anticipating income increases may fall short.
- Anticipating home appreciation may fall short.
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| First Time Buyer Programs | top^ |
| |
- Lower down payment
- Easier to qualify
- Sometimes you may get lower rate
|
- May be subject to income and property value limitations
- Some programs which have government subsidies may have a recapture tax if you sell the house too early.
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| No point, No fee Programs | top^ |
| |
- No closing costs
- Less money required to close
|
- Higher rates
- Higher payments
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Besides our standard loan programs, we also have a large number of unique programs to serve your needs:
- Purchase a house with 0 down with a USDA loan
- Passbook Savings Plan
- Credit Enhancement Program
- Refinances
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Equal Housing Opportunity