TYPES OF LOANS
Disclaimer - This is only a partial list and intended to give an overview of the different loan types. Please contact me directly with any questions or inquiries about other loan types.
Home Equity Conversion Mortgage (HECM)
HECM’s enables homeowners aged 62-plus years to convert a portion of their home’s equity into cash. With a HECM borrowers don’t have to repay the loan until they no longer use the home as their principal residence or fail to meet the obligations of the mortgage. The HECM for Purchase Loan is designed to help mature adults buy their next home with one initial investment (down payment) toward the purchase without having monthly mortgage payments. Basic HECM eligibility: Youngest borrower on title must be at least 62 years of age. Purchased home must be a primary residence occupied by the borrower(s) within 60 days of loan closing. Property must be a single family residence, 2-4 unit owner occupied home, townhome, or an FHA approved condominium or manufactured home.
US Veterans sacrifice a lot to serve our country. I'm proud to serve their loan needs through the VA loan program. This loan program guarantees the lender a portion of the loan amount which enables the Veteran borrower to qualify for a home loan with zero down payment, in most cases. VA loan rates are historically lower than even conventional fixed rates and sometimes even other government loans offered through the FHA and USDA. A Veteran can qualify for their loan whether active or inactive. I work with a VA approved lender which allows for a smooth, efficient loan process to all of my Veteran clients. Streamlined refinances are also available through the VA program.
FHA Loans The benefits of an loan through the Federal Housing Administration (FHA) are an incredibly low down payment requirement and an interest rate often significantly lower than a conventional loan. Borrowers with modest reserves will like that and FHA loan only requires 3.5% down payment and has no restriction on a property's location like the USDA loan. Credit qualification requirements are significantly less restrictive for the FHA when compared to conventional financing. If you think home ownership isn't an option for you because of credit issues, the FHA program may offer the flexibility you need to accomplish your dream of owning your own home.
Used by the United States Department of Agriculture (USDA) as incentive to home buyers looking to buy outside of areas considered generally metropolitan, the USDA loan program affords you with zero down payment, incredibly low interest rates, and mortgage insurance rates that are nearly half the amount of FHA loans. In Central Oregon, areas that currently qualify for this flexible and affordable loan program are Redmond, La Pine, Sisters, and Prineville. Eligibility regions have irregular boundaries, so please contact me if you have a property in mind which you may want to finance through the USDA loan program.
Thirty-Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.
Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.
Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)
These increasingly popular ARMS—also called 3/1, 5/1 or 7/1—can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.
Adjustable Rate Mortgages (ARM)
When it comes to ARMs there's a basic rule to remember...the longer you ask the lender to charge you a specific rate, the more expensive the loan.
This loan has a rate that is recalculated once a year.
With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time, so his vulnerability is significantly reduced.
Remember this is only general information. For specifics please call my office.
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