Fixed Rate Mortgages
The traditional fixed rate mortgage is the most common type of loan programs, where monthly principal and interest payments never change during the life of the loan.
Commonly Used Indexes for ARMs
The most commonly used indexes for ARMs include: LIBOR, Cost of Funds, MTA, One-Year Treasury, and Prime.
Balloon mortgages have a note rate that is fixed for an initial period of time, and then the remaining principal balance is due at the end of the term.
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages, also called fixed-period ARMs, combine features of both fixed-rate and adjustable-rate mortgages.
Interest Only Mortgages
A mortgage is called “interest only” when its monthly payment does not include the repayment of principal for a certain period of time.
Graduated Payment Mortgages
Graduated Payment Mortgage is a loan where the payment graduates (increases) annually for a predetermined period (e.g. five or ten years), and then becomes fixed for the duration of the loan.
Adjustable Rate Mortgages (ARM)
Adjustable Rate Mortgages (ARM)’s are loans whose interest rate can vary during the loan’s term. These loans usually have a fixed interest rate for an initial period of time and then can adjust based on current market conditions.
Components of an ARM
Adjustable rate loan payments will adjust during the term of the loan. These adjustments are calculated using an index and margin. The amount of the adjustment is limited by period and lifetime caps that are specified in the loan documents.
Types of Residential Home Loans offered by Loans Realty Group:
- Conventional Loans – Both fix and adjustable rate mortgages.
- FHA – Low down payment with low fico scores.
- FHA 203k – Rehab loan that fits FHA guidelines.
- FHA Streamline – Refinance an existing FHA loan into another FHA loan without income documentation, but primary goal is to lower current monthly payment. No appraisal needed.
- VA – 100% financing available for our U.S. Veterans.
- VA IRRL – Refinance an existing VA loan into another VA loan without income documentation, but primary goal is to lower current monthly payment.
- USDA – 100% financing available for residential properties zoned agriculture.
- Hard Money Lender – Used by investors with stated income documentation or no income documentation. Rates are typically between 11% – 15% and with 2 – 3 points charged upfront. 1 point equals one percent of the loan amount.
- Non-QM (non-qualified mortgage) – These type of loan programs have interest rates in between conventional (ie Conventional, FHA, VA, USDA) loan rates and Hard Money Lender rates, but it is a full documentation loan. Borrowers opt for this program, because they cannot qualify for the regular Conventional, FHA, VA, or USDA loan programs.
- Bank Statement Program – This loan program is designed for self-employed borrowers, and the lender uses the bank deposits to determine income based on the borrower’s personal bank statements or business bank statements. Lender will require recent 12 or 24 months of bank statements depending on the loan terms of the program. No income tax return required.
- Down Payment Assistance Programs – We have several types of this program. One of them is called Calhfa (California Housing Finance Agency) and it is a 3-loan program. 1st loan can be either Conventional or FHA loan, and 2nd loan covers down payment, and 3rd loan covers most of the closing costs up to a total of 105% combined loan to value. We also have a FHA Grant Program that will cover the down payment and it is not repaid, but it does not cover closing costs.
- ITIN – This loan is for borrowers with Individual Tax Identification Number only and no Social Security number with up to 90% loan to value depending on loan amount.
- Manufactured Home Loan – This type of loan is for manufactured homes on permanent foundation which also includes the land.
- Mobile Home Loan – This type of loan is for mobile homes (double-wide) in which the land is not part of the sale. The land is leased in which you will find in a typical mobile home park.
- Reverse Mortgage – is a type of home equity loan that allows the borrower at the age of 62 or older to convert some of the equity in their primary home into cash without monthly principal and/or interest payment, while they have the right to stay in their home as long as they comply with the loan terms.