Conventional Fixed Rate – The most common type of mortgage program where interest rate is fixed and never changes. Fixed rate mortgages are available for 30 years, 20 years and even 10 years. On a 30-year loan you pay 360 equal payments of principal and interest over the life of the loan. Likewise, 20-15 and 10-year loans are characterized by equal payments, but have a shorter pay-off period with higher payments and slightly lower interest rates. You can save over 50% on interest with a 15-year term.

Fixed rate fully amortizing loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. 

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Adjustable Rate (ARM) –These loans generally begin with an interest rate that is 2 to 2.5 percent below a comparable fixed rate mortgage, and could allow you to buy a more expensive home.

However, the interest rate changes at specified intervals (for example, every year) depending on changing market conditions; if interest rates go up, your monthly mortgage payment will go up, too. However, if rates go down, your mortgage payment will drop also. 

A few options are available to fit your individual needs and your risk tolerance with the various market instruments. 

ARMs with different indexes are available for both purchases and refinances. Choosing an ARM with an index that reacts quickly lets you take full advantage of falling interest rates. An index that lags behind the market lets you take advantage of lower rates after market rates have started to adjust upward.

The interest rate and monthly payment can change based on adjustments to the index rate. 

6-Month Treasury Average ARM
Has a maximum interest rate adjustment of 1% every six months. The Treasury Average index generally reacts more slowly in fluctuating markets so adjustments in the ARM interest rate will lag behind some other market indicators. 

12-Month Treasury Average ARM
Has a maximum interest rate adjustment of 2% every 12 months. The treasury Average index generally reacts more slowly in fluctuating markets so adjustments in the ARM interest rate will lag behind some other market indicators. 

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FNMA and FHLMC Affordable Housing Programs – These are fixed-rate loans initially created by the Community Redevelopment Act to allow more people to qualify for and afford home financing. They require little or no cash reserves and small down payments that can be borrowed, depending upon the program. Homeowner education is required for some programs.

Fannie Mae (FNMA) Flex 97 Loan and Community Homebuyer Program
Max. Housing Ratio = 33%
Max. Debt Ratio = 36-41%, depending on program
Max. LTV Ratio = 97% 

Community Homebuyer – No cash reserves are required. Homebuyer education is required on topics, such as energy efficiency and home maintenance.

Flex 97% loan – Two months of PITI reserves may be required for closing. Gifts, grants, loans from family, government or non-profits and asset-secured loans are acceptable for down payment and closing costs.

Freddie Mac (FHLMC) Affordable Housing Programs: Freddie Mac Alt 97 and Affordable Gold 97 Plus. Gifts, grants and secured or unsecured loans are acceptable for down payment and closing costs.
Max. Housing Ratio = 33%
Max. Debt Ratio =41% and higher with compensating factors. 
Max. LTV Ratio = 97%

Affordable Gold 97 Plus requires 2 months PITI reserves and homebuyer education. Standard mortgage insurance coverage is required. 

ALT 97 requires no reserves and less mortgage insurance coverage, but requires up-front fee of 2 points. Homebuyer counseling is not required. 

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Jumbo Loans – For the year 2006: Single-family, one-unit dwellings loans that exceed $417,000. (Jumbo loans are also called non-conforming loans.)

Fixed-Rate Jumbo
6-month Jumbo LIBOR ARM
1-Year Jumbo ARM
3/1, 5/1, 7/1, 10/1 Jumbo ARMs – 15-, 20- and 30- year terms. Interest is fixed for the first respective number of years, then adjusts annually thereafter for the life of the loan.
Max. LTV Ratio = 95% except for ARMS which = 90%

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Refinancing – Refinancing pays off your existing loan with a new loan. Borrower’s usually refinance to lower their existing interest rate and/or to take cash out. 

Fixed-rate and ARMs programs including cash-out refinancing
Max. Housing Ratio = 29%
Max. Debt Ratio = 41%
Max. LTV Ratio = 75% for cash-out (exceptions up to 80%), sub-prime loans = 90%
Max. LTV Ratio = 95% for no cash-out owner-occupied. 90% for ARMs
Max. LTV Ratio = 70% for investments and 80-90% on second homes 

On owner-occupied and second home purchases with subordinate financing (a second mortgage), the first mortgage cannot represent more than 75% of the lesser of the sales price or appraised value. 

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Construction – Please call us to discuss your options and eligibility. With a construction-perm loan, you don't pay any principal payments during construction, but you do pay interest on the "draws" taken from the account to build your home (usually at prime rate or prime plus 1%). When your home is complete, the loan changes to a full-fledged mortgage and you begin making mortgage payments.

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Condos & Town Homes – Lending is based on the unit's marketability. The development project must be FNMA or FHLMC accepted or have lender warranties. In addition, the project cannot have heavier investor concentration (non-owner-occupied units) than a certain percentage of the total—usually approximately 40% for established projects and 30% for new developments. 

Fixed-rate and ARMs
Max. Housing Ratio =33%
Max. Debt Ratio = 41%
Max. LTV Ratio = 95% if owner-occupied, usually 80% for second homes
Max. LTV Ratio for ARM = 90% 

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Home Equity Loans – If you need to borrow money, our home equity lines may be one useful source of credit. Initially at least, which may provide you with large amounts of cash at relatively low interest rates. Interest paid on home equity loan may also provide you with certain tax advantages unavailable with other kinds of loans. (Check with your tax advisor for details.) 

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Second Mortgages – We also offer second mortgage installment loans. Although second mortgage plan also place an additional mortgage on your home, second mortgage money usually is loaned in a lump sum, rather than in a series of advances made available by writing checks on an account. Also, second mortgages usually have fixed interest rates and fixed payment amounts. Interest paid on second mortgage may also provide you with certain tax advantages unavailable with other kinds of loans. (Check with your tax advisor for details.) 

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FHA (Federal Housing Administration)– Leader Mortgage is an Approved FHA Lender. FHA loans are best for borrowers with little or no down payment.  Please complete the online application to have a Mortgage Specialist contact you to discuss our FHA programs.

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