Types of Loans Available
Purchase Loans (mortgages)
Usually Real Estate buyers provide a down payment towards the purchase price, and the balance of the funds is covered in a purchase loan, or mortgage.
As a broker, we will review your personal information such as credit history, income and available down payment. Using automated underwriting programs, we will determine the risk grade assigned to you by each lender. This will determine your interest rate. This method allows us to compare each lender's programs and rates to get the best mortgage for you.
Some loan programs exist where no down payment is needed, or some will allow additional co-signers to help qualify for a loan. When shopping for your next purchase loan, make sure your mortgage broker has the necessary experience to find you the right mortgage for your needs.
Contact us to schedule an appointment for a free consultation to review all the options that today's market has available for first time buyers, buyers of second homes, investment homes, home upgrades and empty nesters.
If you are already a homeowner, there are two main types of refinance products available, a Rate and Term Refinance or a Cash Out Refinance.
A Rate and Term Refinance is used when a borrower wants to refinance the amount of their present mortgage and closing costs, ultimately reducing their monthly payment or length of their loan. This type of mortgage has very little risk and often will allow the borrower to qualify for the best rates available.
A Cash Out Refinance allows the borrower to take equity (cash), out of their house to pay bills, invest, renovate their property, or many other circumstances. There is a limit to the amount of cash that can be taken out, based on the equity available. If the borrower goes above these lending limits, there will be a higher risk to the lender, and consequently a higher interest rate.
Many times homeowners interested in refinancing will only look at advertised rates without a clear understanding how their credit history, income, loan to value, or equity position can help them qualify for a better loan. We will review all of these factors and quote you the best possible rate based on your specific information.
The Federal Housing Administration, generally known as FHA, provides mortgage insurance on loans made by FHA-Approved lenders. The FHA does not make home loans; they insure the FHA loans that we can assist in getting you. FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. An FHA loan differs from the Conventional loan in the following areas:
- Income - FHA loans allow additional non-owner occupying co-borrowers to be on the application to assist the buyers in qualifying for the loan.
- Assets - Do not have to come from the borrowers own funds. These funds can be a gift from a family member.
- Equity - FHA loans can be as high as 97% of the purchase price and 95% for refinancing, both have no additional cost to the borrowers.
- Credit - Poor credit history in the past or not having any credit scores will not prohibit a potential borrower from getting an FHA loan. Each file is manually underwritten. FHA underwriters look at many other factors outside of just credit.
- Seller Concessions - Sellers are able to contribute up to 6 percent of the mortgage amount up to a maximum loan amount of 103% of the purchase price.
- Assume-ability - FHA loans can be assumed by another borrower as long as they meet the FHA lending requirements. This is a great asset when current interest rates are higher than the rate on the seller's assumable mortgage note.