Fixed Rate Mortgages (FRM)
By far the most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime. In times of low interest rates, this is the best and safest way to go. In times of higher or rising rates we see more adjustable rates.
Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting. I like 7 or 10 year terms. This is where the interest rate and monthly payment are fixed for 7 or 10 years, then adjust every 6 months based on the then current index plus the margin pre-set. There is a lot of misunderstanding here. These are not the loans that cause the mortgage meltdown of 2008. I had a borrower call me in a panic that his loan was about to adjust and could he buy me lunch and talk about it. I said sure, bring your paperwork. I discovered that he had taken out the loan when rates were high. At that time rates were much lower so his interest rate was actually going to drop significantly (I think it was 2 full interest rate points) for the next year in his case, his rate after the fixed period adjusted 1 time per year. His payment was actually going to drop by over $300 per month.
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment. FHA is a great loan to get you into your first home or if you have a low FICO score it is easier and less expensive than a Conventional Loan. However, it has a lifetime mortgage insurance. I look at FHA as a 2 step loan. This may be what we need to do to get you in, but, as soon as possible our goal is to get you out of this loan and into a Conventional program. (usually within 2 years).
As long as you are going to live in one of the units, you can get an FHA loan in our local market for up to $763,600 for a single family home, $977,550 for a 2 unit home, $1,181,650 for a 3 unit home and $1,468,500 for a 4 plex all with only 3.5% or 5% down. This is a great way to house hack and live for free or for a very small amount while your tenants pay your mortgage.
I love VA loans. Thank you Veterans for your service to our great Country. VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership. Also, they are not only for first time buyers of moderate homes. I recently closed a VA Purchase loan for $1,100,000 at a great rate with no monthly mortgage insurance. If you qualify, these are great loans.
Reverse Mortgages allow senior homeowners to convert a portion of their home equity into cash while still living in the home for the rest of their life with NO MORTGAGE PAYMENT! This is not for everybody, but, in the right situation, they can be a lifesaver. Can be used to refinance your existing home even if you still owe money on it or can be used to purchase a new home. I love Reverse Mortgages, let's chat ot see if a Reverse Mortgage may be right for you. I had a client who's husband died and her income dropped by $3800 per month. I suggested that she sell the home and down size. She told me she loved her home and had so many good memories there. So, we did a Reverse Mortgage, paid off her current mortgage (which was taking more than 100% of her income) and now she has no house payment, can enjoy life and never has another mortgage payment for as long as she lives. And it is insured to age 150.
Private Money Loans
We also offer Private Money loans for clients who just do not fit the traditional underwriteing guidelines. If you have had a life situation happen, gone bankrupt, loss of job, suffered a divorce, or if you are self employed and have a difficult time proving income but can put 20% or more down, this might be a good option for you. These are from local business people who loan out their own money.
What kind of loan program is best for you?
Should you get a fixed-rate or adjustable rate mortgage? A conventional loan or a government loan? Deciding which mortgage product is best for you will depend largely on your unique circumstances, and there is no one correct answer. My goal is to work as your trusted advisor to give you your options, then let you decide. No pressure, no pet loan that we are promoting. Just honest advise on what is best for you, not what makes me the most money.