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- Conventional
Fixed Rate (Conforming and Jumbo)
- Adjustable
Rate (ARM)
- FNMA
and FHLMC Affordable Housing Programs
- Balloons
- Jumbo
Loans
- Refinancing
- Construction
- Condos
& Town homes
-
Home
Equity Loans
- Second
Mortgages
- 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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Balloons
– Balloons can be fixed-rate or adjustable-rate loans with one larger
payment (usually the last one) that pays the balance of the loan. On a
5/25 balloon, for example, payments are amortized over 30 years so
payments are low, but the unpaid balance is due in 5 years.
5/25 and 7/23
Max. Housing Ratio = 29%
Max. Debt Ratio = 41%
Max. LTV Ratio = 90%
Two-Step/Reset –
The rate adjusts only once during the 30-year term. For the initial
period, (5 or 7 years), the rate is fixed at the quoted rate. After the
initial period, it adjusts to a new rate by adding a specified margin to
an index. The new rate remains fixed for the 23 or 25 remaining years.
The loan is fully amortized over 30 years. Temporary buydowns are
permitted to lower initial interest rate.
5/25 and 7/23
Max. Housing Ratio = 29%
Max. Debt Ratio = 41%
Max. LTV Ratio = 95%
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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.)
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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