LOAN TYPES

 

 

FIXED RATE LOANS

 

With a fixed rate mortgage, you’ll know exactly what your principal and interest payment will be every month. It doesn’t change because your interest rate doesn’t change.

The only instance in which your total payment can change with a fixed rate mortgage is:  If you pay your home insurance and real estate taxes through your mortgage, any time there is a change in those costs, there will be a change in that part of your mortgage payment as well.

 

 

 

 

ARM LOANS

 

 

The initial interest rate on an adjustable-rate mortgage (ARM) is generally lower than that of a fixed-rate loan. However, with an ARM, the interest rate may increase or decrease in the future, causing your payments to go up or down along with the rate.

Most ARMs are considered “hybrid loans”, meaning that the interest rate is “fixed” for a certain number of years—after which the rate begins to “float.” The most common ARMs fix the initial rate for three, five, or seven years.
 

How do I know if an ARM is right for me?

ARMs are probably most appropriate for people who have sufficient financial resources to handle potential payment increases or know that they plan to sell their home around the time the loan’s interest rate is set to change.

 

 

 

CONVENTIONAL LOANS

 

These loans are yypically for borrowers with higher credit credit scores in the mid 700's and with lower debt-to-income ratios.  The down payment requirements are usually higher than for FHA or VA loans.  You mayb put as little as 3% down if you are under your area income cap, but typically buyers using this type of mortgage are putting 5-20% down.  The maximum loan limit for this type of mortgage is typically higher than that of an FHA mortgage and currently is at $417,000.   One of the advanatges of this option is the PMI you pay eventually comes off once you pay down your loan balance to 78% or lower of your home's inital purchase value.  

 

 

 

FHA LOANS

 

What is an FHA Mortgage?

There is a common misperception among consumers that deserving homebuyers and existing homeowners can no longer secure financing. Nothing is further from the truth!

Yes, today's credit market requires more-stringent lending standards and tightened credit-quality guidelines than in years
past. However, there continue to be numerous home loan programs to assist today's homeowners and homebuyers. An FHA loan program offered through Summit Mortgage is one such option.
 

What are FHA loans?

FHA loans are a type of mortgage loan insured by the Federal Housing Administration. The federal government initially created FHA loan programs to encourage home ownership. The FHA does not supply the loan; it simply insures the loan to limit the risk to the lender.

An FHA insured mortgage can be used to purchase or refinance a single family home, a multi-family home, or a condominium unit. FHA loans allow borrowers without traditional credit histories or income to qualify for a home loan at a competitive rate. FHA loans also have unique features that ease qualifications for first-time buyers to obtain a home loan with a combination of low down payment options and flexible lending guidelines.
 

What are the benefits of an FHA mortgage?

FHA offers low down payment options, eligibility with less than perfect credit, a loan at a reasonable cost, and help if there is ever trouble making the mortgage payment. Because an FHA mortgage insures the lender against loss, an FHA mortgage typically has an interest rate that is competitive with the best in your market and lower than the rates charged for subprime and other non-prime mortgages.

FHA not only helps people buy a home, but helps them keep it as well. In return for protecting lenders against loss, FHA requires financial institutions to offer assistance to borrowers experiencing difficulty making mortgage payments.

 

 

VA LOANS

 

What is a VA loan?

First and foremost, a VA loan is a benefit that America’s veterans have earned as part of their military service. This benefit was made available in 1944 through the original Servicemen's Readjustment Act also known as the GI Bill of Rights. This benefit provides long-term financing to help veterans and their surviving spouse to realize the American Dream with no down payment. The GI Bill has been the largest contributor to the welfare of veterans and their families since its inception.

 

 

  • These loans are government backed which allows lenders to be more flexible in qualifying.

  • A VA loan is one of the only loan programs that provide 100% financing to a borrower in today's market.

  • It does not require private mortgage insurance.

  • There are limitations on the veterans costs.

  • VA loans are currently offered as both fixed rate & adjustable rate mortgages.

 

 

Am I eligible for a VA Loan?

Most all active duty and honorably discharged service members are eligible for a VA home loan.

 

If any one of the following are (is) true you may be eligible for a VA Loan:

  • Served 181 days during peacetime (Active Duty).

  • Served 90 days during war time (Active Duty).

  • Served 6 years in the Reserves or National Guard.

  • You are the spouse of a service member who was killed in the line of duty.

 

 

If you said yes to any one of the statement above, you may be eligible for a VA loan - congratulations!

 

 


USDA LOANS

 

What is a USDA loan?

Today’s USDA loans are no longer a “farmer’s loan”, with recent changes enacted by the USDA millions of Americans are now eligible for financing outside the major metropolitan areas. Until this change many Americans did not serve in the military did not have an option to buy a home with 100% financing. It is difficult to find a loan that has better terms than a USDA loan in today’s market.

 

 

Who qualifies for a USDA Loan?

Eligibility is determined by the location of the county and zip code that the home is located in. In addition, your current income and credit history, as well as the number of dependents you can claim. Because these guidelines are very specific, it is important to work with one of our loan officers that have experience dealing with USDA government financing to help determine your eligibility.

 

Features:

  • 30 Year Fixed Rate

  • It's not "just for farmers," many can now qualify

  • Offer better terms than an FHA or conventional loans

  • Lower Rates and $0 Down Financing

  • Can be used to buy a new home or refinance to a lower rate.

 

 

 

REHAB/FIX-UP LOANS

 

 

      FHA 203K STANDARD & STREAMLINE

Whether you’re looking to complete some minor improvements or need serious repairs to pass your inspection, the 203k is a single loan that can do both! A single loan with one closing that can pay for everything from paint and flooring, to structural repairs, turning your “as-is” home into your dream home.

 

Perfect for today’s short sale & foreclosure purchases, the 203k streamline allows you to get up to $35,000 in addition to your mortgage loan, specifically for minor improvements, repairs and those final touches that make it feel like home.

 

Full 203k Remodel / Rehab loan

You’ve found the perfect home in the perfect neighborhood, but it needs some serious repairs to pass inspection...or maybe you’re looking to add some sq. footage to it to fit your needs? The full 203k loan is perfect for the job. Based on the “as-completed” value of the home, your loan will include the funds necessary to complete the improvements.

 

Available as a 30 yr fixed FHA loan, you can use the 203k purchase loan for improvements to your purchased home, or 203k refinance to cover improvements to your current home. You have up to 6 months to complete the repairs.

 

203k Streamline

The 203k Streamline loan has all the same advantages as the full 203k, with a maximum of $35,000 for improvements. This is perfect for all the upgrades needed with many of today’s homes. Covering everything from new paint to granite counter tops, the 203k Streamline can be used for purchasing a new home or refinancing your current home.

 

   Conventioanl Fannie Mae HomeStyle
HomeStyle mortgages provides a convenient way for borrowers to make renovations, repairs, or improvements totaling up to 50 percent of the as-completed appraised value of the property with a first mortgage, rather than a second mortgage, home equity line of credit, or other, more costly financing method. Eligible borrowers include individual home buyers, investors, nonprofit organizations, and local government agencies.

Benefits to Borrowers
• Cost-effective way to renovate or improve a home
• Single mortgage means lower closing costs and typically a lower interest rate on a first mortgage
• Borrowers can qualify for CLTV of up to 105% with eligible Community Seconds® subordinate financing
• Loan amount based on “as-completed” value of the home or the cost basis (purchase money loans), whichever is less

 

 

 

REVERSE MORTGAGES

 

 

What is a Reverse Mortgage?

A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month.

 

The cash you get from a reverse mortgage can be paid to you in several ways:

  • all at once, in a single lump sum of cash;

  • as a regular monthly cash advance;

  • as a "credit line" account that lets you decide when and how much of your available cash is paid to you; or

  • as a combination of these payment methods.

 

No matter how this loan is paid out to you, you typically don't have to pay anything back until you die, sell your home, or permanently move out of your home. To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.

 

Reverse mortgages or Home Equity Conversion MortgageS (HECM) were designed by FHA to allow you to withdraw some of the equity in your home. The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more.

 

 

 

 

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We are not a lender.  We cannot gurantee the accuracy of loan informaiton posted on this site and make no guarantees of any kind of your ability to qualify for any programs or offers.  This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of MN. Stat. Section 47.206 (3) and (4)