Priority Mortgage OptionsOne of the most difficult aspects of the finance process is sorting through the multitude of loan products currently available. It is confusing! At Priority Mortgage, we’ve done that for you. We can help you easily eliminate the mortgages that you definitely don’t want and focus on a shorter list of mortgages that will be best for your family. Things to consider are: How much down payment you have, if any?; How long you plan to live in the home?; How much home do you need?; How you will pay for closing costs and other expenses?; How many recreational activities outside the home do you enjoy? Considering all aspects of home ownership is key to being a happy and confident homeowner.
Fixed Rate Loans– The interest rate stays the same throughout the life of the loan, so the principal and interest payments never change. Several types of fixed rate mortgages exist and range from a simple refinance to a purchase with no down payment. Most loans that provide for 100% financing will be 30 year fixed rate loans. Based on where the market has been over the last few years, a fixed rate loan has been the obvious choice for most homeowners. ARM (Adjustable Rate Mortgage) Loans – The interest rate stays the same for a fixed period of time and then can change periodically, so the payments will also change. Depending on what is happening in the market, the rate on an ARM loan may be higher, somewhat lower, or much lower than the rate on a fixed rate loan, so it pays to examine both options carefully. First Time Homebuyer Loans - The term First Time Homebuyer Loan is used throughout the industry to explain any loan that helps someone purchase their first home. There are a variety of loans that meet that description, and they are referred to with different names: Flex 100, Freddie 100, My Community Mortgage, Dreammaker Mortgage, Home Possible Mortgage, and Flex 97 to name a few. FHA, VA, and Rural Development loans are also considered first time homebuyer loans, but are not all limited to first time homebuyers. (These are outlined below.) Each loan program has different guidelines that must be met to qualify for loan, typically based on credit, income, and debt. At Priority Mortgage we have access to several different financing options for the first time homebuyer and will gladly help find the right one for your family. Construction to Permanent Loans – A construction loan is for those who wish to build their own home, and is typically a short term loan. After completing construction, long term financing (a permanent loan) will be needed; which is generally a fixed rate loan. There are restrictions on the type of financing available, depending on the loan to value percentage and length of ownership. Working with Bank of Sullivan and Priority Mortgage can assure a smooth transition from construction to permanent financing. Government Backed Loans - A government backed loan is a loan that is backed by the federal or local government in case of default. It protects the lender, and in order to get the backing, the borrower typically pays a guarantee fee or insurance fee. The programs listed below are federal programs, however; we are constantly researching new programs at both the state and federal levels to provide even more options to our customers. USDA Rural Development Loan – This loan is guaranteed by the USDA and is designed for low to moderate income families. There is a fee for the guarantee and it can be added to the loan. This is a 30 year fixed rate loan. No down payment and no PMI is required. There are income restrictions for this program, and vary by county and family size. VA Loan – This loan is guaranteed by the Veteran’s Administration for qualified veterans. We will need a Certificate of Eligibility to determine the entitlement for the loan. This is a 15 or 30 year fixed rate loan, also with no down payment or PMI. This loan also has a guarantee fee. FHA (Federal Housing Administration) Loan – This loan is an insured Housing and Urban Development (HUD) mortgage. There is a fee or premium for having the loan insured. This loan also requires no down payment and no PMI, and is typically a 30 year fixed rate loan. Reverse Mortgages – A reverse mortgage is a home equity loan that borrowers don’t pay back as long as they live in the home – their primary residence. The mortgage releases the equity in the property as one lump sum or multiple payments to the borrower. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves the home. There are fees associated with the loan, interest continues to be charged over the life of the loan, and normal closing costs apply. There are no credit or income requirements to qualify for the loan, but the loan does require FHA insurance and PMI insurance to protect the lender. Borrowers must be 62 years of age, and the loan advances are not taxable. This can be a great loan for those with lots of equity in their home and need an increase in their monthly income. Fixed Home Equity Loans - These loans allow the borrower to take out a second mortgage with a longer fixed rate and term. The interest rate will be higher than that of a conventional fixed rate loan, but the security of knowing that your payment will not fluctuate can be worth it. |
