LOAN OPTIONS

 
To find out which loans work best for you, read through these diverse loan options and choose the one that fits your needs and preferences.

Manufactured housing (MH) refers to home units primarily or completely built off-site at a factory or facility. The home unit is then transported to a property where it is set. Manufactured housing loans can be used for the purchase or refinancing of a manufactured home, a developed lot on which to set the home or a manufactured home and lot combination. The borrower must use the home as their principal residence.

The Home Affordable Refinance Program (HARP) was created by the Federal Housing Finance Agency in March 2009 to allow those with a loan-to-value ratio exceeding 80% to refinance without paying for mortgage insurance. Originally, only those with an LTV of 105% could qualify. Later that same year, the program was expanded to include those with an LTV up to 125%. This meant that if someone owed $125,000 on a property that is currently worth $100,000, they would still be able to refinance and lock in a lower interest rate.

Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. All year round, Fannie Mae and Freddie Mac are working for you, establishing limits on what constitutes a conforming loan in a mean home price.

With a fixed rate mortgage, the interest rate does not change for the term of the loan; the monthly payment is always the same. Typically, the shorter the loan period, the more attractive the interest rate will be.

Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal.

 
 
FHA mortgage loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.

FHA loans are an attractive option, especially for first-time homeowners:

  • Generally easier to qualify for than conventional loans
  • Lower down payment requirements.
  • Cannot exceed statutory loan limits.

Designed to offer long-term financing to American veterans, VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice. It is generally easier to qualify for a VA loan than conventional loans.

Here's how it works:
  • 100% financing without private mortgage insurance or 20% second mortgage.
  • A VA funding fee of 0 to 3.3% (this fee may be financed) of the loan amount is paid to the VA.
  • When purchasing a home, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less.
  • When refinancing a home, veterans may borrow up to 90% of reasonable value in order to refinance where state law allows.

Conventional loans are mortgage loans offered by non-government sponsored lenders.
These loan types include:

  • Fixed Rate Loans
  • Adjustable Rate Loans (ARMs)
  • Combination (Hybrid) Loans
  • Balloon Mortgages and Pledge Asset Loans
  • Jumbo / Construction Loans
  • Reverse Mortgage
 

Many state, county and local government programs offer financing for qualifying low-to-moderate income families wishing to purchase their first home. Loan assistance programs like Mortgage Credit Certificate (MCC) offer a partial tax credit for interest on the loan.

These programs typically offer:


More relaxed qualifying guidelines

Lower upfront fees

Lower interest rate

Fixed rate

Jumbo Loans exceed the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits. Rates on jumbo loans are typically higher than conforming loans. Jumbo Loans are typically used to buy more expensive homes and high-end custom construction homes. Typically Jumbo Loans require a higher down payment than traditional loans.

The USDA home loan is a zero-down payment mortgage for eligible suburban and rural home buyers. USDA loans are issued through the USDA Rural Development Guaranteed Housing Loan Program by the United States Department of Agriculture.


Loan guarantees: The USDA guarantees a mortgage issued by a participating local lender allowing you to get low mortgage interest rates, even without a down payment. However, if you put little or no money down, you will have to pay a mortgage insurance premium.
Direct loans: These mortgages are for low and very-low income applicants. Income thresholds vary by region. With subsidies, interest rates can be as low as 1%.
Home improvement loans and grants: These loans or financial awards allow homeowners to repair their homes.

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