It’s a good idea to gain a basic understanding of the kinds of home mortgages that are available. As you review the list, keep in mind that these categories widely overlap — for example, we provide adjustable-rate FHA loans and fixed-rate jumbo mortgages. As your partner through the mortgage process, Tamborrel Properties can help you determine the best loan to fit your needs and design a custom financing solution for you.
Fixed-rate mortgages. The interest rate remains fixed for the life of the loan.
• Offer predictable monthly payments of principal and interest throughout the life of the loan.
• Provide protection from rising rates. No matter how high market rates go up, your interest rate stays the same.
• Generally well-suited to borrowers who plan to stay in their homes for a long period of time, have a fixed or slowly-increasing income, and have a lower tolerance for financial risk.
Adjustable-rate mortgages.The interest rate adjusts periodically to reflect market conditions on pre-determined dates.
• The initial introductory period usually offers a lower rate (relative to fixed-rate mortgages),after which the rate adjusts periodically, based on a market index.
• Borrowers are protected from steep increases in rates through annual and lifetime adjustment caps.
• The initial rate can be locked in for different periods. Typically, the rate readjusts annually after the introductory period.
• Because of the introductory period’s lower rate, some borrowers may be eligible for a larger loan amount with an ARM than with a fixed-rate mortgage.
• May be more appropriate for borrowers who may want to sell or refinance early, can afford to make larger monthly payments after the rate adjusts, or are looking to buy a home when interest rates are relatively high.
Jumbo loans. These are loans that exceed a specified size (conforming loan amounts).
• In 2006, jumbo loans on single-family homes exceed $417,000 ($625,500 in Alaska
• Rates are generally higher on jumbo loans than on smaller comparable loans
FHA Loan. The Federal Housing Administration (FHA) insures a wide variety of mortgages. These loans are designed to meet the needs of homebuyers with low or moderate incomes and feature:
• Low down payment requirements
• Loan limits based on geographic locations
• Generally more liberal qualifying guidelines
• Use of gift funds for down payment and/or closing costs.
VA Loans. The Department of Veterans Affairs (formerly the Veterans Administration) guarantees mortgages for qualified veterans and active-duty military personnel and their spouses who are first- or second-time homebuyers. VA loans feature:
• Low or no down payment requirements
• A wide range of rate, term, and cost options
• Flexible qualifying guidelines
• Use of gift funds for closing costs
Alternative financing. These programs are designed for borrowers with less-than-perfect credit histories, excessive debt, or previous bankruptcy, foreclosure or tax delinquency.
No Documentation Loans. Designed for borrowers who are self-employed, on commission or whose financial situation may be difficult to document.These loans allow borrowers to apply for a loan based on their credit history and stated income.
Your Tamborrel Realtor can recommend the financing solution that’s exactly right for you.