30 Year Fixed Rate Program
A 30 year fixed conventional loan is a type of mortgage loan that is repaid by the borrower making 360 equal monthly payments over a period of 30 years.  Since the borrower's payments are "fixed", the borrower can expect to make the same monthly payment for the entire term of the loan.  A 30 year mortgage loan is the most widely accepted program used to finance a residential purchase and is available for FHA, VA, conventional and jumbo loans.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Monthly payments are fixed over the life of the loan Interest rate does not change Protected if rates go up Can refinance if rates go down Higher interest rate Higher mortgage payments Rate does not drop if interest rates improve Qualifications may differ with certain types of loans and individual lenders. Documentation may differ with certain types of loans and individual lenders.

15 Year Fixed Rate Program
A 15 year fixed mortgage is identical to a 30 year fixed mortgage except for the fact that it is paid off in half the time.  The result is a considerable decrease in the total intrest paid over the life of the loan with only a moderate increase in monthly payments.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Advantages are identical to the 30 Year Fixed Rate Program - PLUS Loan equity build-up is much faster. Considerable reduction in term interest cost. Interest rates are generally lower. Disadvantages are identical to the 30 Year Fixed Rate Program - PLUS Monthly Payments are moderately higher. Qualifications may differ with certain types of loans and individual lenders. Documentation may differ with certain types of loans and individual lenders.

Adjustable Rate Loan Program
An Adjustable Rate Mortgage (ARM) is a mortgage loan that is most widely known for its low starting interest rate (when compared to the 30 & 15 year mortgage loans).  This "low" introductory rate is used to calculate the mortgage payment for a specified period of time.  Once this introductory period is over, the interest rate is adjusted periodically based on a preselected index. The most commonly used index is the yield on the one-year Treasury Bill.  The new interest rate is determined by adding this index to a set margin (which is determined by the lender).

Although there are a variety of adjustable rate mortgage programs available, the most common program is the One Year Adjustable Mortgage (one Year ARM).  The interest rate on the one year ARM is adjusted once each Year, for 30 years.  APR's on variable rate loans are subject to increase but may decrease from year-to-year, the borrower should be prepared to handle an increase in his/her monthly payment (should the index rate increase).

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Lower initial monthly payment Lower payment over a shorter period of time Rates and payments may go down if rates improve May qualify for higher loan amounts More risk Payments may change over time Potential for high payments if rates go up Qualifications may differ with certain types of loans and individual lenders. Documentation may differ with certain types of loans and individual lenders.

FHA Loan Program
FHA, also known as the Federal Housing Administration, operates under the control of the Department of Housing and Urban Development (HUD) and has the primary responsibility for administering the government home loan insurance program. This program allows buyers who might otherwise not qualify for a home loan to obtain one because the risk is removed from the lender by FHA.

The most popular FHA home loan program nationwide is the 203(b) FHA home loan (see below) that only requires a minimum of 3% from the borrower and permits 100% of their money needed to close to be a gift from a relative, non-profit organization, or government agency.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Lower credit criteria than FNMA or FHLMC No prepayment penalty No cash reserves required FHA regulated closing costs Seller can pay up to 6% towards buyer’s costs Can be Assumable Upfront and Monthly MIP Required must run credit on a non-purchasing spouse Down Payment = 3.5% Minimum Credit Score = Minimum Debt-To-Income Ratio = Some qualifications may differ with certain underwriters. STANDARD + Drivers License Social Security Card Additional documentation may be required under certain conditions.

VA Loan Program
These loans are made by a lender, such as a mortgage company, savings and loan or bank. VA's guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn't previously used the benefit may be able to obtain a VA loan up to $240,000 depending on the borrower's income level and the appraised value of the property. The local VA office can provide more details on guaranty and entitlement amounts.

These loans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing, as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION No Down Payment You must be a veteran to qualify. Down Payment = 0% Minimum Credit Score = Minimum Debt-To-Income Ratio = STANDARD + DD214 Certificate of Eligibility Additional documentation may be required under certain conditions.

Conventional Loan Programs
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ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION - - Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Some qualifications may differ with certain loan programs. STANDARD Additional documentation may be required under certain conditions.

Jumbo Loan Programs
A jumbo mortgage is a mortgage loan which is larger than the limits set by Fannie Mae and Freddie Mac (currently $300,700). Since these two agencies will not purchase these types of loans, they usually carry a higher interest rate (to enhance their value and marketability to investors).

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION - - Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.

First Time Buyer Programs
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ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Lower down payment Easier to qualify Sometimes you may get lower rates May be subject to income and property value limitations Some programs which have government subsidies may have a recapture tax if you sell the house too early. Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Some qualifications may differ with certain loan programs. STANDARD Additional documentation may be required under certain conditions.

Stated Income Programs
A Stated Income loan is designed for the self employed borrower and require no verification of income or assets. The loan is approved based upon the income and assets you state on your application and credit score. These loan programs are frequently called EZ Doc, Low Doc, or No Income Verification loans.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Don't need to verify income Faster approval Higher rates Higher down payment Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.

No point, No fee Programs

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION No closing costs Less money required to close Higher rates Higher payments Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.

Imperfect Credit Programs

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Potential for reestablishing credit if you pay your mortgage on time. When used for debt consolidation, you may be able to reduce your monthly debt payment Higher rates Terms may not be as favorable Harder to get long term fixed loans Loans may have prepayment penalties Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.

Balloon Programs
A balloon mortgage loan is a type of mortgage loan that has a short term (typically 5 or 7 years), but the monthly payment is computed using a 30 year term. When a borrower uses a balloon loan, he/she will make the monthly payment for the scheduled loan term (5 or 7 years). When this loan term is over, the borrower is required to pay off the remaining balance in one lump-sum payment.

If the borrower decides not to sell the property after the loan term is over, the borrower has the option to refinance the mortgage with a new one. A 7/23 balloon mortgage gives the borrower the option to convert to a fixed rate program (for a nominal fee) after the initial term (7 years) is over. If the conversion feature is used, the interest rate for the remaining term of the loan (23 years) will be adjusted once to reflect market conditions, then remain fixed for the remainder of the loan term.

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Lower initial monthly payment Lower payment over a shorter period of time Many balloon mortgages offer the option to convert to a new loan after the initial term. Risk of rates being higher at the end of the initial fixed period. Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option. Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Some qualifications may differ with certain loan programs. STANDARD Additional documentation may be required under certain conditions.

Home Equity Line of Credit

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION You only borrow what you need Pay interest only on what you borrow Flexible access to funds Interest may be tax deductible Rates can change The maximum interest rate is normally high. Payments can change Harder to refinance your first mortgage Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.

Home Equity Fixed Loan

ADVANTAGES DISADVANTAGES  QUALIFICATIONS  DOCUMENTATION Fixed payments Interest may be tax deductible Higher interest rates than on 1st mortgages Harder to refinance your first mortgage Down Payment = 20% Minimum Credit Score = Minimum Debt-To-Income Ratio = Qualifications may differ with certain types of loans. STANDARD Additional documentation may be required under certain conditions.