Mortgage Types

No Down Payment - F.I.R.M.- A.R.M -Credit Rehabilitation - Debt Consolidation - Home Improvement - Equity - SubPrime - Cash Out

No down payment or 100% LTV loans Fixed, FIRM or ARM

• These loans are the fastest growing among the new crop of loan programs.  Don't expect to get the low interest rates advertised in the media for these loans, but the rate is usually about a 1/4 to a 1/2 percent higher for borrowers with the best credit. The great thing is that most of these loans are also available to borrowers with less than perfect credit. Of course the lower the credit, the higher the rate. Several loan programs include 100% single-family mortgages, combinations loans with an 80% first mortgage and a 20% second mortgage, full-documentation and stated income.
   

• Some of these programs require the borrower to have at least 3% of their own money for closing costs, but many new No Down Payment Loans allow the closing costs to be a gift, allow the seller to contribute to the closing costs or allow the closing costs to be financed into the loan amount!

Fixed interval rate mortgage, (F.I.R.M. loans) or hybrid loans 
amortized over 30 years, but fixed for a set period of time

• These loans usually have lower fixed rates for a short period then usually become an adjustable  rate loan,  AND allow for easier qualification at the lower rate and/or higher loan amounts. Are designed for first time home buyers, borrowers who are in the beginning of their career, investors in real property, or a family that has flexible income. Frequently they have a prepayment penalty for early payoff.  (3 years, 5 years, 7 years, etc.)

Adjustable rate mortgages (A.R.M) 
amortized over 30 years, but the rate adjusts after a set short period of time

• These loans usually have the lowest initial rates. AND are designed to help families purchase their home easier. Can have the lowest qualifying rate and may have a possibility of negative amortization. Are also designed for first time home buyers, families who are in the beginning of their career, self-employed or commissioned borrowers, investors in real property, or a family that has flexible income. Frequently have a prepayment penalty for early payoff. These loans also appeal to short term buyers. (1 month, 3 months, 6 months, 12 months)

Credit rehabilitation or debt consolidation programs

These loans can have higher interest rates than the above programs and can maximize the loan to value ratio to above the current value of the property.

These loans are available to 100% Loan-to-Value and up to 125% LTV as a Fixed, FIRM or ARM.

• Debt consolidation, available only on a refinance basis. Used to lower total out of pocket expenses. Can have the same low rates as the above, except possibly a higher cost for cash out. These loans are available to borrowers with good or bad credit.
   

• Credit rehabilitation, purchase or refinance, used to restore less than perfect credit. Loan is intended to be refinanced, after 12 months to 36 months, to a lower interest rate. These loans are available to borrowers with good or bad credit. 

Both frequently have a prepayment penalty for early payoff.

Home improvement or equity loans to 125% LTV

Several options are available, depending on the equity in the home, improvements planned or an individual's situation. These loans are often offered as 2nd mortgages, equity lines or complete home improvement loans.

• FHA loans have limits on the purpose of the home improvement

• Non-FHA loans can be used for any purpose, as well as a combination of home improvement and debt consolidation

SubPrime loans

Sub Prime loans are for people with less than perfect credit and do not meet conforming mortgage guidelines.

Cash Out

Cash-out is not available on a PURCHASE transaction! Refinancing your property is another matter.

Cash-out is usually not available above 80% LTV, if you have great credit.

Most lenders say they don't care what you use the money for when you want cash-out, as long as you understand what "cash-out" really means. If you believe they don't care, think again. Lenders want to know the reason for the cash out. They want to know that you are not buying something and using the cash-out as a down payment on something that will have to be calculated into your debt ratios, which could cause the loan to be denied, if the debt ratios were too high.

Paying off your credit cards, installment debts and liens against real estate is considered cash-out..

Paying off a personal unsecured loan, to your Aunt or Uncle or anyone else, is considered cash-out, even if they gave you some money to buy the house, even if you have a legitimate document evidencing the debt.

Property Improvements, acquisitions, and anything else that adds to the amount of your mortgage is considered cash-out.

                                     

       Questions?
E-mail us today!