There are many loan programs available – too numerous to cover them all, we’ve highlighted the programs more commonly offered today. Characteristics of each loan program are unique, so consult your mortgage professional for more information and to become familiar with the details of the programs available to you.
To help determine the best loan program for you, consider the following:
- How important is payment certainty? If knowing that your payment will be the same every month is important, consider a fixed-rate mortgage.
- How important is rapid equity buildup? If rapid equity buildup is a factor, consider a shorter amortization period, such as a 15-year, fixed-rate mortgage.
- Do you anticipate increasing or stable income? If income growth is anticipated, you could take advantage of a lower start rate on an ARM or a temporary buydown.
Other Factors to Consider Include:
- Ability to qualify at market rates for loan amount selected
- Anticipated term of occupancy
- Possibility of significant rate changes
- Existence of up-front costs
Types of Loans
Fixed Rate Mortgages (FRM)- The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime.
Adjustable Rate Mortgages (ARM)- Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting.
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)- Hybrid ARM mortgages combine features of both fixed-rate and adjustable rate mortgages and are also known as fixed-period ARMs.
FHA Loans- FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment.
VA Loans- VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership.
Interest Only Mortgages- Interest only mortgages are home loans in which borrowers make monthly payments solely toward the interest accruing on the loan, rather than the principle, for a specified period of time.
Components of an ARM- Prior to choosing a home loan, you should know the advantages and risks of adjustable-rate mortgages to make an informed, prudent decision.
Commonly Used Indexes for ARMs- This article includes a list of the most commonly used indexes by ARM lenders that affect ARM mortgage rates.
Balloon Mortgages- Balloon mortgages include a note rate that remains fixed initially, and the principal balance becomes due at the end of the mortgage term.
Reverse Mortgages- Reverse Mortgages allow senior homeowners to convert a portion of their home equity into cash while still living in the home.
Graduated Payment Mortgages- Graduated Payment Mortgages are loans in which mortgage payments increase annually for a predetermined period of time (e.g. five or ten years) and becomes fixed for the remaining duration of the loan.
Other Home Loans
- Cash Out Refinance
- FHA Home Improvement Loans
- FHA Spot Loans
- Bridge Loans
- Hard Money Loans
- Piggyback Mortgage
- Real Estate Investor Loans
- Reverse Mortgages
- Second Mortgage
- Stated Income Loans
- Subprime Mortgages
- Jumbo Mortgages
- Zero Down Mortgage Loans
Alternative Lending Programs
- 24 Month Bank Statement Program – Business or Personal / Self Employed FICO score 600-649 to 75% LTV- Greater than 650 Maximum LTV 80%.
- Up to 75% “No Seasoning” on Recent Short Sales Can be combined with Bank Statement Program for Self Employed FICO 600-649
- Owner Occupied with Short Sale Greater than 1 Year to 80%LTV
- Owner Occupied with a Bankruptcy or Foreclosure > 2 Years to 80% LTV
- Owner Occupied Cash Out to $1,500,000
- Second Home and Non Owner to 75% LTV
- Consumer Assistance: Unlimited Gift Funds, Seller or Institutional Seconds to a CLTV of 80%, Seller Concessions to 6%