CONVENTIONAL - Allowed for purchase and refinance loans.
Conventional financing offers various fixed rate & ARM loans. A minimum down payment is 3% if a person meets specific guidelines. Otherwise, the minimum is 5%. Private mortgage insurance (PMI) is required if the down payment or equity position is less than 20%. The PMI is automatically removed when the loan balance reaches either 78% or 80% of the purchase price or appraised value, whichever is lower. Conventional loans can be taken for a primary home, 2nd home or investment property for a 1-4-unit property. Gift funds are allowed for the down payment & costs if the loan is for a primary or 2nd home.
FHA - Allowed for purchase and refinance loans.
FHA financing also offers various fixed rate and ARM loans. 3.5% is the minimum down payment. Mortgage insurance is required on FHA loans, no matter how much down payment or equity a person has. FHA requires a One-Time UpFront Mortgage Insurance Premium (OTMIP OR UFMIP) which is financed on top of the base loan amount, as well as a monthly amount included in the monthly payment. The mortgage insurance remains on the loan for the life of the loan when the minimum down payment amount is used. This loan must be used for a primary home only. FHA rates are generally lower than conventional rates. However, after adding the mortgage insurance, they are very close in overall rate compared to
the conventional loan. 1-4-unit properties can be financed with these loans as long as the borrower will be occupying at least one of the units. Gift funds are allowed for the down payment and closing costs.
VA - Allowed for purchase and refinance loans.
VA financing also offers various fixed rate and ARM loans. To obtain a VA loan a person must be a Veteran of the Armed Forces or currently serving in the military. These loans are offered with zero down payment. VA charges a funding fee that is added to the mortgage amount and the fee amount depends on various items. However, this is waived for disabled veterans. Only a primary home can be financed with a VA loan. Gift funds are allowed for the costs.
USDA - Allowed for purchase and refinance loans.
USDA offers 30-year fixed rate loans. 100% financing is available for people who meet the income limits and property location restrictions. The USDA fee is 1% and is financed into the loan. This is a great loan for people and properties that fit the requirements. This loan must be used for a primary home only. Gift funds are allowed for the costs.
HOME EQUITY LINE OF CREDIT - Allowed for purchases, refinances, or stand-alone.
When considering additional cash needed, for any purpose, a HELOC may be an option to help with down payment or in conjunction with or in place of a refinance. A HELOC is a loan that works like a checking account or credit card. You are provided a maximum amount of money. Interest is charged ONLY when you access the money. Generally the amount is accessible for 10 years, at which time the access to the funds is cancelled and any balance that is owed at that time is paid off over a 10-20 year timeframe. The rate will fluctuate with Prime Rate + an additional set percentage. A HELOC can be paid off and re-accessed numerous times during the draw period. This loan becomes a 2nd lien against your property.
SECOND MORTGAGE - Allowed for purchases, refinances, or stand-alone.
When considering additional cash needed, for any purpose, a second mortgage may be an option to help with down payment, or in conjunction with, or in place of a refinance. A second mortgage is a set amount of money provided with a fixed rate and fixed payments for a specified period of time. Similar to a car loan, interest is charged from the day you take the loan until the day it is paid off. Once it is paid off the loan is done. This loan becomes a 2nd lien against your property, hence the name.
REVERSE MORTGAGE - Allowed for purchases and refinances for homeowners that are at least 62 years old.
Refinance - This loan will enable older homeowners to utilize the equity in their home without selling. The loan does NOT have to be repaid until the last borrower vacates the home. No payments are required during the term of the mortgage. This frees up other monthly income to afford other necessities while living on a fixed income.
Purchase - This loan can be used for older borrowers who want to purchase a home and have the benefit of no payments while they live out the rest of their lives in the home. This will require a large down payment. The typical borrower is someone that is downsizing, has sold their larger home, and has considerable equity from the sale of their previous home to place as a down payment on a smaller home.
This is generally done on a FHA loan but can be done on a conventional loan for those with higher home values needing the help of a Jumbo Reverse Mortgage.
FIXED RATE MORTGAGE - Available for Conventional, FHA, VA, USDA (30-year only), and SECOND MORTGAGES.
One of the many types of home loans offered to borrowers is called a fixed rate mortgage. Unlike an adjustable rate mortgage, the monthly payments for a fixed rate mortgage stay stable through out the life of the loan. This type of home loan is most commonly available in 10, 15, 20, 25, and 30-year mortgages and can provide the stability many home buyers require during unstable economic times.
ADJUSTABLE RATE MORTGAGE (ARM)- Available for Conventional, FHA, VA, and HELOCs.
Adjustable rate mortgages allow the interest rate on your home loan to fluctuate during it's life at designated times based on particular paramaters that can cause the payment to increase or decrease. When financial markets are unstable, adjustable rate mortgages can be risky for homeowners because the rate can increase. When rates are low, ARMs tend to be less popular. When it comes to ARMs, there's a basic rule to remember...the longer you ask the lender to charge you a specific rate, the more expensive the loan. There are various types of ARMS and each has its pros and cons.
Monthly ARMs have an interest rate that is recalculated every month. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time. Annual ARMs have a rate that is recalculated once a year.
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM) can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years with the rate and payment adjusting annually. It's a good choice for people who expect to move or refinance before or shortly after the adjustment occurs. All of these are available for Conventional loans. 3/1 and 5/1 are available for FHA & VA.
ALL IN ONE MORTGAGE (ARM) - Conventional loan only.
This is a special mortgage that is set up combining a checking account with your mortgage. The mortgage is set up like a Home Equity line of credit and the rate and payment fluctuate as the rate index for the loan fluctuates. For people who have high incomes, low debts, or perhaps large commissions or bonuses at various times, this may be a great mortgage to be able to pay your loan off in a short period of time. A higher down payment or equity position is required for this loan. The bank will sweep the checking account every night and apply any balance to the mortgage balance, lowering the overall interest paid on the mortgage. When a check or debit is presented to the account, it is paid by increasing the mortgage balance for that debit. For many years companies have used this same type of sweep to pay down their company lines of credit. Now this is available to homeowners.
Borrowers will need a construction loan if they are building a custom home. Construction loans are necessary because of the longer time frame and special requirements of the building process. There are regular construction loans that usually provide 6-12 months to complete the construction of the home and then are required to be paid off with a refinance loan. During construction, interest is charged only on the amount of the loan that has been disbursed at any given time. Some banks offer One-Time-Close Construction Loans that will finance the construction of a primary or secondary residence and the permanent loan when construction is finished. A One-Time-Close construction loan requires borrowers to sign only one set of documents and allows borrowers to lock in a rate for the permanent loan at the beginning of construction. This type of home loan will allow for up to 12 months of construction time and, during the construction period, interest is charged only on the funds that have been disbursed. There are additional qualifications that borrowers need when they begin the application process for a construction loan. Some of the additional requirements will be sufficient liquid assets, building department permit, plans and specifications of the house that is going to be built, and a contract with a Builder.
2/1 BUY DOWN MORTGAGE - Conventional & FHA.
The 2/1 Buy-Down Mortgage allows the borrower to make payments at below-market rates. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for three full years or more will keep their average interest rate in line with the original market conditions. When rates are low, this is a less popular and less cost effective option.
NO INCOME OR STATED INCOME -Conventional only.
These loans are generally used for self-employed people who write-off a large part of their income on tax returns in an effort to pay lower taxes. These loans do not require tax returns be provided and the income is either not indicated on the loan application or is stated in an amount that does not include the writeoffs.
HARD MONEY - Conventional only.
This loan is a band-aid loan for a person that is needing to purchase or refinance a home and cannot otherewise qualify for a loan. These loans are provided at a significantly higher rate and fees and require larger equity positions, such as 30% - 50%.
ACADEMY NATIONAL MORTGAGE CORPORATION - NMLSR #191799
SERVING ALL OF COLORADO
Phone: 303.987.0622 / Cell/Text: 303.902.0082