Mortgage programs - There are a wide variety of mortgage programs available to both consumers buying homes and to consumers who are interested in refinancing their homes. There are fixed rate mortgage loans, adjustable rate home loans, pay option arms, interest only loans, 40 year term loans, stated income documentation loans, and tons of other programs available. So no matter what your credit is or how hard your income is to document, it is very likely that there is a mortgage program available that will fit your exact needs.For many people the first question they ask when they call a mortgage broker is "What is your rate?" when they should really be asking "What can you do for me?" Given the large variety of programs available there isn't one rate that applies to everyone. While your interest rate is important, finding the program that best fits your needs should be your top priority. Talk to your mortgage professional about what is most important to you, and what your plans are for the future. How long do you plan to be in the home? Is it more important to keep your payments as low as possible, or to pay down your mortgage as quickly as possible? How comfortable are you with the possibility of your interest rate adjusting in a couple years. Are you self employed? If so, can your income be verified? The answers to these types of questions will help determine which plan, or plans will work out best for you in the long run.
40-Year Fixed Rate Mortgage is ideal for younger home buyers. It offers lower monthly payments with the security of a fixed interest rate for the entire loan term. Many banks also offer a variation of the 40 Year Fixed Rate home loan, the 40/30, also known as the "40 due in 30". The 40/30 is a mortgage product that is amortized over 40 years but the loan comes due in 30 years. In other words, the monthly payments are calculated as a 40-year loan, but at the end of the 30th year, the entire balance becomes due.
Mortgage Loan Programs - A loan program is just a way of saying what type of loan you are applying for. There are loan programs to suit just about every kind of borower. There are programs for poor credit, no credit, great credit, no way to prove income, high debt ratios, etc.
An experienced loan officer will know all of these programs so that they can help get almost any borrower a loan. Not everyone will qualify for a mortgage, and there is no way around that. However, with the wide array of loan programs available, there is a good chance that YOU can get a loan TODAY.
One example of a loan program that has become popular recently is the pay option ARM. Basically, it gives you the option of making four different payments each month:
-Minimum payment (you actually pay less than the interest due for the month, and the difference is added to your loan amount)
-Interest only payment (you only pay the amount of interest that is due for the month)
-30 year amortization (pay the amount that it would take to pay off the loan in 30 years)
-15 year amortization (pay the amount that it would take to pay off the loan in 15 years)
As you can see, this loan program offers a lot of flexibility. However, it is based on an ARM, so the interest rate is always changing. Also, it can be tempting to make the minimum payment every month, but if you do, you'll find yourself owing more on your home then when you started. Many innocent homeowners have been lured into this loan with promises of low rates or payments, only to find that things weren't as they appeared.
There are literally thousands of different mortgage loan programs available out there. To name a few: 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM, Pay Option ARM, 30/15 Balloon Mortgage, 30/7 balloon, 30 year fixed rate, 20 year fixed rate, 15 year fixed rate, 3/1 interest only ARM, 5/1 interest only ARM, etc.... There are also different income verification programs available, such as: stated income stated asset, stated income verified asset, no income no asset, no ratio, no doc., 12 months bank statements, 24 months bank statements, and many many more. This is just a very short list of some of the thousands of mortgage loan programs available. Many times different loan programs are combined also such as: an 80/10 (1st and 2nd mortgage), cash-out, interest only loan with no income documentation. While all this can sometimes be very confusing to a homeowner, a good mortgage broker can find the "right" program that best suits each unique situation of each borrower.
One very important thing to keep in mind about mortgage loan programs is that they are never carved in stone. Changes in market conditions and investment climates cause lenders to have to make changes to their programs and guidelines. Don't make the mistake of thinking that just because a program that you qualify for exists today that it will always be there.
Nearly 80 % of all mortgages today are being negotiated by Mortgage brokers. This is because today there are so many different programs to choose from - the process can indeed become daunting. Let a mortgage professional guide you thru the myriad of choices to find the program that suits your needs.
Mortgage brokers are a good source for unique loan programs. Local and commercial banks usually grant loans only to those who have perfect credit history, sufficient income and with strong assets. In addition to these type of loan programs, most mortgage brokers also have access to niche loan products for home buyers in less than perfect financial situations, such as high debt-to-income ratio, high loan-to-house value ratio, no-income-verification, bad credit, history of bankruptcy and foreclosure, etc. Some brokers also have loan programs for unique homes, such as multi-million dollar home, condominium and cooperative units that do not qualify Fannie Mae guidelines, etc.
Mortgage Programs - What types of mortgage programs are available? There are tons of mortgage programs that are available for consumers. The most common home loan program available is the 30 year fixed rate mortgage. This is simply a 30 year home loan that has a fixed interest rate for the life of the loan. Your principal and interest payment will never change on this loan. If you have included your taxes and insurance into your payment also that would be the only way your payment can change. Your property taxes or homeowners insurance would have to increase or decrease for you to see a change.
Many lenders are now offering 40 year mortgages (some even include an interest only option). If your payment is too high, ask your preferred mortgage professional if extending the length of the mortgage is your best solution.
Stated income loans allow you to simply state the income on your 1003 loan application without supplying documentation as with other loan types. This type of loan program normally holds a higher interest rate than with programs that require income documentation.
No Doc loans do not require you to show employment, income, or assets on your loan application. This loan type is a good match if you recently switched from W2 employment to a self employed individual.
Another popular loan, a hybrid of sorts to the standard thirty year fixed, is the thirty year fixed - with an Interest Only payment option. For the first ten years of this loan, the borrower has the option to make an interest only option, which offers a lower monthly payment. The interest rate on this loan does not change for the entire thirty years term.
The Pay Option ARM is a loan that allows you to choose from four different payment options each month. You can make a minimum payment, interest only payment, 30-year amortized payment, or 15-year amortized payment. These options allow you to decide how much you want to pay each month. This loan may be a good choice for self-employed people whose income changes from one month to the next, or real estate investors who want to keep their payments low to maximize cash flow.
A Federal Housing Administration(FHA) mortgage can be an excellent tool for you to purchase your first home. FHA requires a 3% down payment, that can be gifted to you. One of the benefits of FHA is the attractive rates, even if you do not have the best of credit. FHA guidelines can be more strict, than with most other mortgage programs. There is also a mortgage insurance premium (MIP) that will be required with all FHA loans, but the premium can be financed into the loan. Your mortgage broker, can help you decide if an FHA loan is right for you!
What Are Affordable Mortgage Programs? - Affordable Mortgage programs are geared toward low to moderate income buyers. They usually come with maximum income restrictions based on where you live and allow for Traditional credit grading. Also, many of these programs have no down payment, no reserve requirements, reduced PMI, and allow income from non-traditional sources.
The MyCommunity program is an excellent choice for many first time homebuyers, especially those with minimal cash to put down. It allows you to purchase a home with as little as $500 down. The biggest benefit in addition to flexible credit standards may be that the interest rate, and mortgage insurance rates nearly as low as an FHA loan which typically requires 3% of the purchase price down.
Some banks offer loan programs through mortgage broker to home buyers of properties located in Low-to-Moderate-Income areas. These LMI mortgage programs may offer the home buyers lower interest rates or in the form of incentives to mortgage brokers so the home buyer's settlement fees are lower.
