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Types of Loans

There are many loan programs available - too numerous to cover them all, we've highlighted the programs more commonly offered today. Characteristics of each loan program are unique, so consult your mortgage professional for more information and to become familiar with the details of the programs available to you.

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

How important is payment certainty? If knowing that your payment will be the same every month is important, consider a fixed-rate mortgage.

How important is rapid equity buildup? If rapid equity buildup is a factor, consider a shorter amortization period, such as a 15-year, fixed-rate mortgage.

Do you anticipate increasing or stable income? If income growth is anticipated, you could take advantage of a lower start rate on an ARM or a temporary buydown

Other factors to consider include:

  • ability to qualify at market rates for loan amount selected
  • anticipated term of occupancy
  • possibility of significant rate changes
  • existence of up-front costs

    

 

Loan Programs

Characteristics

7, 10, 12, 15, 20, 22 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.  

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.  

FHA

· FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) - which is part of HUD - insures the loan, so your lender can offer you a better deal
            - Low down payments
            - Low closing costs
            - Easy credit qualifying

· What does FHA have for you?
Buying your first home? FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

· Want a fixer-upper? FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan

VA

 

· The VA Loan is a great choice for qualified Veterans as they typically carry a lower APR than most other mortgage programs available. It is important that your Loan officer know the loan program well, it is easy to run into trouble in underwriting that could ruin your chances of getting approved. Don't be afraid to ask how much experience they have with VA Loans upon application. 

Some highlights of the VA loan program include:

· Purchase Loans:

· No down payment may be required. *Depending on loan limits and entitlement.

· Up to 4% of closing costs can be paid with seller concessions *this may include other debts owed by the Veteran.

· Funding fee from 1.25% (regular military with 10% down) to 3.3% for subsequent use.

· VA Streamline - IRRRL (Interest Rate Reduction Refinance Loan): VA to VA

· Funding fee of only .5%

· No credit report, appraisal, nor income verification may be required.

· The loan to value will allow for up to 100% or more. *Lender requirements may vary

· Funding fee of 2.15%, 2.4% for Reserves/National Guard, or 3.3% for subsequent use.

· Loan to value up to 90%

· Loan being refinanced does not have to be a VA Loan.

Other perks:

· Never any PMI (private mortgage insurance).

· Loan amounts up to $417,000, higher limits available in certain counties around the states. *Funding fee included.

· Flexible underwriting, we will leave it at that, too many what ifs, ands, or buts.

· All VA loans may be assumed by another qualified Veteran with only a .5% funding fee.

· Veterans with a service connected disability of 10% or more the funding fee is waived.

· Jumbo loans available *Down payment equates to 25% of the VA county loan limit or 25% of the loan amount, whichever is less.

· Construction, and Manufactured Home Loans are also available, other restrictions apply.

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

 

 

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Arcstone Financial Inc. NMLS #344236 NMLS #1165699
1917 Hillhurst Ave #205, Los Angeles, CA  90027
Office:  (323) 665-5000
kyle@arcstoneinc.com
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