Loan Products – Conventional | FHA | VA | USDA | Adjustable | Fixed Rate
Each of the various types of loans offers some special feature of value to the borrower. It is our goal to match you to the best loan product while getting you the lowest rates possible!
When you think of the traditional 20% down 30 year fixed rate loan, this is it! What many do not realize is that conventional loans requirements allow as little as 5% to 19% down if the borrower is willing to pay mortgage insurance. Mortgage Insurance is a policy that the borrower pays for to help minimize the extra risk that the lender is taking because you did NOT put 20 % down. Conventional loans are available in 10, 15, 20 and 30 year (and occasionally even 40 years) fixed maturities. Adjustable rates are also available. Loan amounts are Conforming (below $417,000) to Jumbo (over $625,000 to millions)
If you are a first time home buyer, have limited down payment money or need help from family to make the buying experience happen, then this could be the product for you. Down payments as low as 3.5% with 15 or 30 year maturities. They allow for renovation, energy efficiency updates and non occupying co-borrowers. Most FHA loans have mortgage insurance. All FHA loans offer unique extra long term benefits. For example a no appraisal or no income verification to holders if they ever refinance their loan! And it is the last of the assumable loans too. If you need a loan with a lot of flexibility, this is it!
Armed Forces, National Guard, Reservists, Coast Guard are among the military groups who have benefits of a VA loan. As a benefit to our Veterans these loans go down to zero percent down with the added benefit of no mortgage insurance! VA loans also restrict costs and certain fees charged in the loan process. If this loan is available to you – look no further!
Yes, the same governmental agency that inspects and stamps your meat also has a housing division – Rural Housing! It has been in existence for many years with the same goal of providing affordable housing and loans to individuals willing to live in rural areas. Both the borrower (income limits) and the property (geographic area) must qualify to have access to the USDA loan. This is another zero percent down payment loan. This is a 30 year fixed loan with modest levels of mortgage insurance. Don’t be fooled…many counties are still deemed in a USDA zone. We are happy to provide you with a property eligibility and income eligibility table.
Home Affordable Loans
In an effort to help homeowners during the economic downturn a loan was established to allow homeowners whose loan was greater than their property value a chance to refinance. The purpose was to help borrowers take advantage of the lower interest rates. This loan is limited to borrowers whose loan is owned by Fannie Mae or Freddie Mac prior to June 1, 2009.
Homepath is a loan specifically created by Fannie Mae to help Fannie Mae homes owned due to foreclosure to be readily available to be purchased by the public. There is no appraisal or mortgage insurance required. Purchase as low as 3% down.
Down Payment Assistance Programs
Funds for down payment assistance programs are still available. Most availability is through local municipalities as an attempt to foster growth in targeted areas. The largest entity is the California Homebuyer’s Down Payment Assistance Program better known as CHDAP. In brief it is 3% down payment assistance available for lower to moderate income families. It is a deferred payment loan only payable until the home is sold or refinanced. These programs are coupled with both conventional and FHA loans.
Adjustable Rate Mortgages vs. Fixed Rate Mortgages
Fixed rate mortgages are just that – the interest rate on the loan remains the same for the entire maturity of the loan. The principal and interest payment is constant for the life of the loan. The benefit is predictability of payment and minimization of risk.
Adjustable rate mortgages are quite different than fixed. Adjustable rate mortgage rates fluctuate for all or part of the maturity. Simplistically the rate is based on an index (for example LIBOR – London Interbank Offered Rate) to which a fixed margin (a number of points) is added. As the index fluctuates up and down so does the mortgage interest rate and thus the payment.
Feel free to contact me to discuss these product programs in more detail!