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TYPES OF LOANS WE PROVIDE......
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Many people do not attempt to refinance because they think it won't help them, or they don't buy a home because they think they won't qualify. It is so unfortunate because they should look to someone who is qualified to make that determination, instead of trying to decide on their own, with inadequate or incorrect information, what their true situation is. This section is very important because it will give you an idea of the tools we have at our disposable to provide the right loan for you - regardless of the situation. So get a cup of coffee, relax, and spend just a few minutes reading the section below...... |
The types of property that we provide loans for are:
• Single Family Dwellings • Manufactured Homes(Doublewide)
• Condominiums • Modular Homes
• Duplexes Commercial • Properties
•Four Plexes • Investment Properties
• Log cabins • Vacation Homes, and
Commercial Loans
You will have one of two types of loans...
 Generally speaking, you will either have a conforming loan or a non-conforming, or subprime, loan. The discussion of each type of loan is a general discussion, since the characteristics of one may blend into the other. But essentially, they refer to prime borrowers, or those who have the best credit scores, income, and equity, and non-prime borrowers, who may not have the best of all of those features. You will need to depend on your loan officer to help you ultimately decide which loan is best for you because he or she is trained to consider all aspects of your financial situation and is intimately familiar with all aspects of each type of loan.
Conforming Loans
Generally, a conforming loan has the best rates. The rates you see posted in the newspaper and on TV refer to conforming loans. People see these rates and expect to get them when they do not qualify. Such is advertising. A conforming loan is generally for those borrowers who have the best credit scores, some equity in the property, good income (relative to the loan), and some liquid assets for strength. Not all of these things are needed for the loan in all cases, as each loan is structured differently. The key to this type of loan is that is based on 20% equity in the property, or an 80% loan to value (LTV). Any amount over 80% LTV is subject to Private Mortgage Insurance (PMI) imposed by the lender to cover what they have determined is increased risk to them. This is an amount added onto your monthly payment and will remain on your loan until you have achieved 20% equity in the property. Your loan officer, after examining all aspects of your loan, may even suggest a subprime to loan to you because, even though the subprime rate may be actually a little higher, your ultimate payment may be lower because you do not have PMI added to the payment. Also, conforming lenders restrict the loan-to-value if you're getting cash out to 90% LTV. However, the conforming loan is always what your loan officer will look at first for you in order to get the best rate possible on your loan.
Non-conforming, or Subprime, Loans.
These loans are sometimes referred to as "B" or "C" loans. These loans are for borrowers who may not have the best credit scores or income history, but are also used by "prime borrowers" everyday for a number of reasons. This is simply the type of loan provided for those borrwers whose every circumstance deosn't indicate that a conforming loan is best. They are the type of loan used exclusively, however, for those borrowers with lower scores who want high loan-to values.
The highlights of the loans we provide are:
100% to 125% LTV loans - Up to 125% of the value of your home.
Investment (Non Owner Occupied) Properties - For those who want an investment property other than their primary home. We can provide loans for up to 10 investment properties
Loans with credit score down to 500 and below
Loans down to $25,000 - many lenders have lower limits of $50,000 or even $60,000
Loans with no upper limit - Pick your home, we will provide the financing
Stated Income Loans - If your loan does not debt ratio, we will state the income necessary to complete the loan. These loans are for both self-employed and W-2 employees
No documentation Loans - Literally, no income documentation whatsoever.
Loans with seller paid closing costs - The lenders will allow the seller to pay closing costs up to 6% o the loan amount
Loans using only bank statement for income documentation - the lender will allow you to use the deposits from your bank statements as income in qualifying for the loan
First Time Homebuyers - it doesn't matter if you've never owned a home before
Foreclosure Bailout Loans - If you are in danger of losing your home through foreclosure, call us immediately so we can prevent it.
Hard Equity Loans - These loans require no credit report, no income, no job, or anything else. Only equity in their property
Refinances with no seasoning - If you got a good deal on a home, and want to refinance the next day, the lenders will allow us to use the actual appriased value on the home
Loans for those in CCC(Consumer Credit counseling)
Loans with no tradelines - Usually lenders want to see some credit history - now they don't.
Loans using the spouses credit score - If the primary borrower has a low credit score, the lenders will now allow us to use the spouse's higher credit score to qualify for the loan, as long as the spouse is employed.
Loans for those one day out of bankruptcy - If you went into bankruptcy, you can buy or refinance a home the next day if you like.
No ratio loans - these are in lieu of stated income or no documentation loans in which no debt ratio is used
Loans for borrowers with no FICO score, no Tradelines, and No Income
Loans for Foreign Nationals
Other factors that will be a consideration when structuring your loan:
Generally speaking, your loan will be a fixed rate or an adjustable rate loan. No matter the type of loan you ultimately obtain, they all will be either fixed rate or adjustable rate or a combination of the two.
FIXED RATE LOANS
With a fixed-rate loan, your monthly payment of principal and interest never change for the life of your loan. Your property taxes may go up (we almost said down, too!), and so might your homeowner's insurance premium part of your monthly payment, but generally with a fixed-rate loan your payment will be very stable.
Fixed-rate loans are available in all sorts of shapes and sizes: 10-year, 15-year, 20-year, 25 - year, 30-year, or now even a even 40-year term. Regardless of which term you choose, they all can be placed on a "biweekly" mortgages and shorten the life of your loan. With a bi-weekly mortgage, your monthly payment is divided by two and you make the payment every two weeks, a total of 26 payments a year - which adds up to an "extra" monthly payment every year.
During the early amortization period of a fixed-rate loan, a large percentage of your monthly payment goes toward interest, and a much smaller part toward principal. That gradually reverses itself as the loan ages.
You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.
Adjustable Rate Mortgages -- ARMs, as we called them above -- come in even more varieties. Generally, ARMs determine what you must pay based on an outside index, perhaps the 6-month Certificate of Deposit (CD) rate, the one-year Treasury Security rate, the Federal Home Loan Bank's 11th District Cost of Funds Index (COFI), or others. They may adjust every six months or once a year.
Most programs have a "cap" that protects you from your monthly payment going up too much at once. There may be a cap on how much your interest rate can go up in one period -- say, no more than two percent per year, even if the underlying index goes up by more than two percent. You may have a "payment cap," that instead of capping the interest rate directly caps the amount your monthly payment can go up in one period. In addition, almost all ARM programs have a "lifetime cap" -- your interest rate can never exceed that cap amount, no matter what.
ARMs often have their lowest, most attractive rates at the beginning of the loan, and can guarantee that rate for anywhere from a month to ten years. You may hear people talking about or read about what are called "3/1 ARMs" or "5/1 ARMs" or the like. That means that the introductory rate is set for three or five years, and then adjusts according to an index every year thereafter for the life of the loan. Loans like this are often best for people who anticipate moving -- and therefore selling the house to be mortgaged -- within three or five years, depending on how long the lower rate will be in effect. They may also be recommended by your loan officer in other circumstances.
You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up. With ARMs, you do risk your rate going up, but you also take advantage when rates go down by pocketing more money each month that would otherwise have gone toward your mortgage payment.
Stated Income Loan
This is a loan which we use a lot today in working with both purchases and refinances, because it allows both wage earners (W-2 employees) and self-employed individuals whose income is not adequate for a verified income loan. The income required to " debt-ratio the loan is simply stated on the application (by the loan officer - don't do this yourself) after the loan officer has determined that your verifiable income is insufficient for the loan. With a stated income loan the lender does not require paystubs, W-2's, or tax returns, but instead just wants to see a Verification of Employment from the wage earners employer, or in the case of the self employed, proof that he has been self-employed for two years (sometimes even less). Of course, the rate is a little higher than with a standard (verified income)loan, but we're after all asking the lender to use the stated income figure to make the loan.
Why would a lender allow this? The decision is based solely on the borrower's credit score or his willingess to pay back the loan, and the higher the score, the more the lender is willing to lend relative to the value of the home. We now even have lenders who will make a stated income loan with a credit score of 500, which is generally considered to be a low score. Your loan officer will talk with you about a stated loan should he determine that you need one.
At the top of the page-Talk about the types of property, the different criteria , the loan to values, (gather all of the niche sheets)
Option Arms
This loan program is an adjustable rate mortgage with added flexibility of making one of several possible payments on your mortgage every month, in order to better manage your monthly cash flow. It's low introductory start rate allows you to make very low initial mortgage payments and low qualifying rates enable you to qualify for more home.
The minimum payment option can help keep your monthly payments affordable. If the minimum monthly payment is not sufficient to pay the monthly interest due, you can always avoid deferred interest by choosing the interest-only payment option.
With the Option ARM, you generally have at least two fully amortized payment choices, leading to a quicker loan payoff. If you prefer to pay off your loan on schedule, you can make the fully amortized payment based on a 30-year loan, or you can choose the 15-year payment option for the fastest equity build-up.
In most cases, you can also make additional principal payments which reduce the amount you need to pay in later months.
Option ARM loan programs are right for you if you'd like to own your property only for a short time, and prefer affordability and flexibility in your monthly payment. However, if you select the minimum payment option in the early years, you should be prepared for possible sudden increases in your monthly payments thereafter.
Option ARM loans have four major types of payment options:
- Minimum Payment
With the minimum payment option, your monthly payment is set for 12 months at your initial interest rate. After that, the payment changes annually, and a payment cap limits how much it can increase or decrease each year.
If you make the minimum payment after the end of your initial interest rate period, which holds only for the first month, it may not be enough to pay all of the interest charged on your loan for the previous month and the unpaid interest will be added to the principal balance you owe (will be deferred).
- Interest-Only Payment
With the interest-only payment option, you can avoid deferred interest, when the minimum payment is not enough to pay the monthly interest due. The interest-only payment option, however, is not available if the interest-only payment would be less than the minimum payment. Please note, that this payment option does not result in your principal reduction.
The interest-only payment may change every month based on changes in the ARM index used to determine your fully indexed rate.
- Fully Amortizing 30-Year Payment
With fully amortizing payments, you pay both principal and interest and keep your loan on schedule. Your payment is calculated each month based on the prior month's fully indexed rate, loan balance and remaining loan term.
- Fully Amortizing 15-Year Payment
If you prefer to put your loan on an accelerated schedule and can afford higher monthly payments, the 15-year payment option allows you to repay your loan twice as faster and save more than half the total interest costs of a 30-year loan.
Please note, that this payment option is offered only on the 30-year (or 40-year) term. It will cease to be an option when the loan has been paid to its 16th year.
These options should be clearly marked on your loan statement, so it is very easy to figure out how much you should pay each month. Just enter the correct amount in the payment coupon section of your statement.
Option ARM loan programs are becoming more and more popular today, and there are many variations of this innovative home financing product on the market: Pay Option ARM, Pick-A-Payment Loan, 1 Month Option ARM, CashFlow Option Loan, LIBOR (or 12-MAT) Pay Option Loan, etc. If you are thinking about applying for an option ARM, it is important to shop carefully and investigate several loan products, to find the one best for you.
Option ARM loan programs may vary in the initial rate, negative amortization and lifetime caps, ARM index, or optional features, however, when comparing one option ARM with another, pay close attention to the margin and the fully indexed rate. Keep in mind that the initial interest rate holds only for the 1st month.
What features to compare with different Option ARM loans?
Loan Term
Option ARM loans are available for 30 or 15 years. *
Initial Interest Rate
Your Minimum Payment Rate or 'Start Rate'. It may vary from 1.25% up to 3.95% and depends on your Loan-to-Value Ratio (LTV).
Initial Interest Rate Period (Introductory Period)
With 1-month option ARMs, the initial interest rate holds only for the first month, thereafter the interest rate may change monthly.
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