Loan Programs

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Purchasing or refinancing a home is a long-term financial commitment, and our expert mortgage professionals are committed to ensuring that you know exactly what you’re getting into before you take the plunge.

There are a number of different programs available, so to help you narrow your search, we’ve put together a quick guide that will help you to identify your loan options.

Mortgage Lending Quick Guide

To determine the best loan program for you, you should consider the following factors:

Payment Certainty

If you’re on a monthly budget, and need to keep your mortgage payment to a specific amount, then a fixed rate mortgage is your best and only option.

However, if your financial situation allows you to handle a little bit of uncertainty with regards to your payment amount, you may want to explore other loan options such as an adjustable rate mortgage (ARM).

Equity Accumulation

Generally speaking, the longer the term of your mortgage, the longer it takes for you to start accumulating a significant amount of equity in your home. If maximizing equity accumulation is one of your goals, then you should consider a loan with a shorter amortization period such as a 15 year, fixed rate mortgage.

Income Growth

Though they’re not for everyone, adjustable rate mortgages (ARMs) and temporary buydowns can be beneficial for buyers who are expecting significant and nearly certain income growth in the near future. These types of programs offer lower payments initially, which will increase in the future according to the specific terms of your loan.

Anticipated Term of Occupancy

If you’re purchasing your dream home, then you’re probably going to be considering different loan options than the recently relocated corporate executive on a five year temporary assignment.

If you’re planning to raise a family and eventually retire in the home you’re purchasing, then a fixed rate loan with a longer amortization might be appropriate for you.

But if you’re not planning on staying put for longer than a few years, you might benefit from the lower payments that an interest only loan or an adjustable rate mortgage (ARM) can offer.

Ability to Qualify

There are a number of factors that may affect the types of loan programs that you can qualify for, such as the amount of available money that you have up front, the amount that you need to finance, and your credit history. Our experienced mortgage professionals will talk you through the details and help you to make the best decision based on the realities of your individual situation.

 

Loan Program Overview

Loan Programs Characteristics
15 and 30 Year Fixed-Rate Mortgages
  • Interest rate does not change
  • Principal and interest (P & I) does not change
  • Fixed-rate mortgages fully amortize over a defined period of time and are paid in full at the end of the loan term
  • Different loan terms are available (15 and 30 year terms are most popular)
  • The shorter the term, the faster equity is built and the loan is paid off
Fixed-Rate Balloons
  • P & I payment and interest rate do not change
  • Regular monthly P & I payments are based on 30 year amortization, while the unpaid balance (balloon) is due at the end of a shorter, predetermined term (typically 5, 7 or 10 years)
  • Interest rate is typically less than fixed-rate loans
  • Most borrowers anticipate refinancing or selling prior to the end of the balloon term
Fixed-Rate with Temporary Buydown
  • Borrowers or the seller may pay to temporarily “buy down,” or lower, the interest rate
  • Decreased interest rate reduces the monthly payment
  • Lower interest rate may help borrowers qualify more easily; qualifying factors may vary
  • Interest rate/payment is typically reduced for 1, 2 or 3 years
Interest-Only Mortgages
  • There are no reductions to the principal amount
  • There is no provision for negative amortization
  • Payments may increase up to an amortized amount, but the loan balance itself does not increase
  • Generally, interest-only payments are limited to the first 5, 10 or 15 years of the loan
  • After that, the loan is amortized for the remainder of its term
Adjustable-Rate Mortgages (ARMs)
  • There is potential for the interest rate/payment to fluctuate
  • ARMs transfer to borrowers a portion of the risk associated with a changing economy
  • In exchange for sharing the risk, ARMs offer borrowers initial interest rates that are substantially lower than fixed-rate mortgages
  • The lower interest rate may help borrowers qualify more easily; qualifying factors may vary

 

Available Programs

Now that you know a little bit about the types of programs available to you, feel free to contact us and one of our experienced mortgage professionals will help you get started.

We offer a number of different programs to help you maximize your options, including:

  • Conventional loans including fixed rate, interest only, and adjustable rate mortgages (ARMs)
  • Federal Housing Administration (FHA) loans, including FHA 203(k) rehabilitation loans
  • United States Department of Agriculture (USDA) loans
  • VA loans, for US veterans
  • 100% financing for VA and USDA loans
  • Jumbo loans for larger loan amounts
  • Gift funds available in many cases