MORE SOLUTIONS FOR YOUR GROWING FINANCIAL NEEDS

CONVENTIONAL LOANS

Conventional loans are mortgages offered by non-government-sponsored lenders, and can include Fixed Rate Mortgages, Balloon Mortgages, Pledge Asset Loans, Jumbo Loans, Construction Loans and Reverse Mortgages.

FIXED RATE MORTGAGES

Fixed rate mortgages feature unchanging interest rates for the life of the loan, giving borrowers the stability of a monthly payment that never fluctuates. Most commonly, fixed rate mortgages extend for either 15 or 30 years. There are pros and cons to each. Here are some rules of thumb.

• The shorter the term of the loan, the more attractive the interest rate.
• The shorter the term of the loan, the higher the monthly mortgage payment.
• The longer the term of the loan, the more interest you will pay over time.
• The longer the term of the loan, the lower the monthly mortgage payment.

JUMBO LOANS

Because they exceed the maximum loan amount allowed for conventional Fannie Mae and Freddie Mac loans, Jumbo Loans typically have higher interest rates than conforming loans. Jumbo Loans are most commonly used to purchase expensive, often custom-construction properties. Typically Jumbo Loans require borrowers to provide a higher down payment than traditional loans.

CONFORMING LOANS

Conforming Loans meet the criteria established by Fannie Mae and Freddie Mac in terms of total loan value. Limits, which are determined yearly, list as follows:

Conforming Loan Limits:

# of Units            Maximum Original Principal Balance        Alaska, Guam, Hawaii and U.S. Virgin Islands

1                              $417,000                                                              $625,500*

2                              $533,850                                                              $800,775*

3                              $645,300                                                              $967,950*

4                              $801,950                                                              $1,202,925*

* Conforming loan limits in Alaska, Hawaii, Guam and the U.S. Virgin Islands is 50% higher.

FHA LOANS

FHA Loans are so named because they are insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development. They are often a preferred option for first-time homeowners because they are:

• Often easier to qualify for
• Require a lower down payment
• Cannot exceed statutory loan limits

VA LOANS

VA mortgage loans offer the security of long-term financing options to American veterans. Because they are issued by federally qualified lenders and guaranteed by the U.S. Veterans Administration, VA mortgages offer security and peace of mind to people who have served in the armed forces. Typically, VA loans require less-stringent demands than do conventional loans.

The benefits of VA loans to veterans are many, including:

• Financing without private mortgage insurance.
• A funding fee up to 3.3% of the loan amount (which may be financed) is paid to the veterans administration.
• Veterans may borrow up to 100 percent of the sales price or value of a home, whichever is less.
• When refinancing, veterans may borrow up to 90 percent of the reasonable value of a home.

RURAL HOUSING SERVICE (RHS) LOANS

To help low- and moderate-income individuals living in small, rural areas experience the benefits of home ownership, the Rural Housing Service offers low-cost loans called RHS Loans. Loans can be applied to the purchase and renovation of an existing property or a new construction. Borrowers are responsible for paying their monthly mortgage, homeowner’s insurance and property taxes. Helping make the loans available to people without substantial available funds are minimal closing costs and a zero or low down payment.

STATE AND LOCAL HOUSING PROGRAMS

Low- to moderate-income families can often find financing options with State and Local Housing Programs designed specifically for people in their financial situation who desire to purchase their first home. Such programs – including the Mortgage Credit Certificate (MCC) – feature lighter qualifying guidelines, lower upfront fees, a lower fixed interest rate. Often, these programs include a partial tax credit for the interest paid on the loan.

B, C LOANS

Loan applicants who have a spotty credit history, have filed for bankruptcy, or had a property in foreclosure may benefit from B,C Loan programs. These loans – which do not meet the credit requirements of Fannie Mae and Freddie Mac – are typically issued as temporary loans, helping the borrower rebuild his or her credit and qualify for a conforming loan. Interest rates on B, C Loans are generally higher than conforming loans.