Types of Loans

Dignified Home Loans offers numerous home loan options for homebuyers.  Contact me to find the home loan that is right for you.  After an assessment of your goals and finances, I will be able to make specific recommendations that can any include any of the different types of loans listed below.

 

Thirty-Year Fixed Rate Conventional Mortgage - Purchase or Refinance
The traditional 30-year fixed-rate loan has an interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. It’s generally harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because the interest rate can be locked in for the life of the loan.

Fifteen-Year Fixed Rate Conventional Mortgage - Purchase or Refinance
This is a 15-year loan with an interest rate and monthly payments that never change. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that the monthly mortgage payment is higher for a 15-year loan. Some borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

Adjustable Rate Mortgages (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM) - Purchase or Refinance
The interest rate on these types of loans adjust on a predetermined basis.  Most adjustable rate loans have a fixed interest rate for a certain period of time at the beginning of the loan, and then adjust up or down after the fixed period expires according to the index on which the loan is based.  For example, a "5/1 ARM loan" has a fixed monthly payment and interest rate for the first five years and then the rate may adjust each year thereafter for the remaining 25 years. The initial interest rate on adjustable rate loans is almost always lower than the interest rate on a traditional 30-year fixed mortgage.  These loans usually include a lifetime cap so the monthly payments cannot increase indefinitely.

FHA and VA Mortgage – Purchase or Refinance
FHA insured loans are backed by the US Federal Housing Administration. VA loans are guaranteed by the US Department of Veteran Affairs. Traditionally, these loans have been a good alternative to Conventional loans for those borrowers with little to no down payment or who may have had minor credit issues in their past. They are available in both Fixed Rate and Adjustable Rate options and have competitive rates in this mortgage environment. As the name suggests, VA loans are only available to United States veterans, including eligible Reservists and National Guard personnel, or their surviving spouses.

Jumbo Non-Conforming Mortgages– Purchase or Refinance
The Jumbo loan picks up where the Conventional loan leaves off in terms of loan amount. Borrowers with a need for loan amounts above the county specific Conventional loan limits can still apply for Jumbo loans. Both Fixed Rate and Adjustable Rate options are offered in this lending space. Average interest rates for Jumbo loans are typically higher than those for Conventional loans, but compensating factors like high credit quality and greater down payment amounts can help narrow the gap.

 

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