Loan Information Library
Which Loan Program Will Best Suit Your Needs?

Fixed Loan Programs
Fixed rate loans provide the least risk to lenders over the long term. If you are planning to keep your home for a period beyond what you are able to predict, a 30 year fixed rate loan is for you. Interest rates remain unchanged for the entire duration. Because the term is fixed for 30 years, the rate that a lender will charge is slightly higher when compared to shorter terms. The tradeoff is security at a higher price.

How long you intend to live in the property plays an important role in deciding what loan is best for you. Fixed rate loans with shorter terms are also available. The advantage is that you pay off your loan sooner and the interest rate is lower than the 30-year fixed rate. With a shorter term fixed rate loan, your payments are higher because you are prepaying more of your outstanding balance each month, and your loan will be paid off sooner. Our experienced staff will explain the various options available to you.

Adjustable Rate Loan
If you are planning to stay in your existing or new home for a specified period, adjustable rate financing may be your best choice. First time home buyers who are likely to upgrade to a larger home should consider this option.

Adjustable rate loans are typically fixed for a period of time, and then after that period the interest rate will adjust according to a specified index. The rate, when adjusted, is determined by the index plus a margin.

The initial fixed term on an adjustable loan can be for as little as a month or as long as 10 years. It is important to determine how long you intend on owning your home to allow for an informed choice on the type of adjustable rate program that you would consider. Any of our loan officers will be happy to explain the details.

No Income Verification Loans
If you are self-employed, have made a career change in the last year, or want to maintain privacy regarding your tax returns; you may want a no-income loan option. No-Income programs typically require a borrower to have more equity in the transaction. Since the lender has not substantiated the earning power of the buyer, the borrower usually will pay a slightly higher interest rate because these transactions are riskier. Please contact us to determine if you qualify.

No-Doc Loans
A no doc program provides a borrower with the opportunity to secure a mortgage without disclosing any asset or income information. The rates are higher due to the increase in the loan risk. The less information provided to the lender, the greater the risk for the lender.

A no-doc loan concentrates on the borrowers credit and the value of the property. These loans will typically require equity of 30% or more and an excellent credit history. Please contact us if you would like to see if you qualify for this type of loan.

Non-Owner Occupied Investor Programs
Investment properties are generally defined as a property being rented. Second (vacation) homes are not considered investment properties. An investment property cannot consist of more than four rental units. These mortgages require complete documentation about the borrower and the property. Typical down-payment requirements are as much as 20% of the purchase price. Interest rates can be fixed for as long as 15 to 30 years. The rates are generally about 3/8 percent higher than normal owner occupied rates. Please contact us if you are interested in this type of loan.

Home Equity Line of Credit
Home equity loans are used for a variety of needs including debt consolidation, medical debts, vacations, property purchases, and almost anything else for which you need extra money.

A Home Equity Line of Credit is a second mortgage that provides you with funds as needed without disturbing your existing first mortgage. Home Equity Lines of Credit operate differently than most mortgage products. A Home Equity Line of Credit is an actual line of credit. Interest is only charged when funds have been drawn against the account. Funds can be paid back, only to be available on demand when needed later.

Home Equity Line of Credit interest rates are tied to prime plus which is a margin of zero to four or more percent. Allowable loan amounts differ from program to program. One general rule of thumb is 80% of the property value minus the existing first mortgage. Some Home Equity Line of Credit programs can access all remaining equity in a home. Make sure you consult your accountant about the various tax advantages that may be available to you before securing your loan.

Zero-Point/Zero-Fee Loan?
With a zero-point/zero-fee loan, you have no closing costs. As a result, if interest rates drop in the future you could refinance for no cost!

If your interest rate is 8.75% and the current rate drops to 8.25%, you could refinance and save .5% and you could continue to refinance to match dropping rates as often as you like. If you did not have a zero-point/zero-fee loan, you could be charged points each time you refinance and at times the points paid could be more costly than the amount which you would save by refinancing.

The zero point/zero fee loan eliminates the need to do a break-even analysis since there is no upfront expense that needs to be recovered. It also is a great way to take advantage of falling rates. Some consumers have used zero-point/zero-fee loans on adjustable loans to refinance their adjustables every year and pay a very low teaser rate. Zero-point/zero-fee loans in many cases are good deals.

Zero-point/zero-fee loans are especially attractive when rates are declining or when you plan to sell your house in less than 2-3 years. Zero-point/zero-fee loans may not be around forever. Lenders have discussed adding a prepayment penalty to such loans, however few lenders have taken steps to implement such a measure.