Mortgage Programs

There are many types of loans available that can be used to finance the purchase of your home.  Loans secured by real estate are known as mortgages. Below is a brief description of many of the mortgage types available. There are litterally thousands of loan "products" available. If you have very specific needs there is sure to be a program designed with you in mind. There are both government and private loan programs. Contact me if you'd like help locating a lender that specializes in your desired loan type.

Private Money

Conventional Loans

The only security guarantee is the value of the property.

Conforming Loans - Conventional loans that follow the terms and conditions established by the guidelines of Fannie Mae and Freddie Mac.

  • Fixed-Rate Mortgage
    The interest rate and the principal payments remain fixed throughout the loan. Note that your monthly escrow account payment could vary from year-to-year as taxes and insurance rates change. Is a fixed or adjustable rate mortgage better?

  • Variable or Adjustable-Rate Mortgage (ARM)
    The interest rate onthis type of loan fluctuates over the period of the loan. Periodic adjustments, at predefined intervals, to the interest rate are made based on changes to a defined index. The loan's interest rate is determined by adding a fixed number of points to the defined index.

  • Balloon Loan
    This is a short term, fixed-rate mortgage that has monthly payments usually based on a 30-year amortization schedule and a lump sum payment due at the end of term. The term is usually 3, 5 or 7 years. The interest rate on balloon loans is usually less than a 15- or 30-year fixed-rate mortgage.

  • Piggyback (Second)
    A second mortgage that closes with the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" or "second" is for 10%. The home buyer covers the remaining 10% with their down payment. (Some lenders will write a second mortgage of 15% or even 20% of the purchase price.)

  • Housing Finance Agencies
    These agencies offer special loan programs to low and moderate income buyers, buyers interested in rehabilitating a home in a targeted revitalization area, and other groups as defined by the agency. Working through a finance agency, you can receive a below market interest rate, down payment assistance, and sometimes other incentives.

Jumbo and Non-Conforming Loans
These loans are above the maximum amount established by the guidelines of Fannie Mae and Freddie Mac. manytimes, the interest rate charged for a jumbo or non-conforming loan is higher than that of a conforming loan.

  • B/C Paper Loans
    Loans for borrowers who cannot meet the credit guidelines established by Fannie Mae and Freddie Mac. The purpose is to offer temporary financing to someone whose credit history or other factor disqualifies them for a conforming loan (including someone who has recently filed for bankruptcy, foreclosure or late payment on their credit report). The interest rates usually run higher and vary depending upon the individual credit situation.

Government Money

FHA Loans
The Federal Housing Authority (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low to moderate income families qualify for mortgages. The FHA assists first-time buyers and others who would not qualify for a conventional loan, by providing mortgage insurance to private lenders. The interest rates for an FHA loan are usually the going market rate, while the down payment requirements for an FHA loan are lower than conventional loans. The required down payment can be as low as 3 percent and the closing costs can be included in the mortgage amount.

VA Loans
VA Loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA Loan, which usually offers a competitive fixed interest rate, no down payment and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.

FHA, VA, Fannie Mae, and Freddie Mac Websites
There are programs available to help people purchase a home with less than 20% down. These include FHA (Federal Housing Administration) loans, VA (U.S. Department of Veterans Affairs) loans, Fannie Mae and Freddie Mac loans, and conventional low down payment mortgages.

For information on FHA loans, see the U.S. Department of Housing and Urban Development's web site at http://www.hud.gov.

For information on VA loans, see http://www.va.gov.

Fannie Mae (Federal National Mortgage Association) is a congressionally chartered secondary-mortgage market company that buys loans from private lenders. For information on Fannie Mae loans, see http://www.fanniemae.com.

Freddie Mac (Federal Home Loan Mortgage Corporation) purchases mortgage loans from savings and loans, mostly. For information on Freddie Mac loans, see http://www.freddiemac.com.