Mortgage Options:
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Every client is different, has different needs, different restrictions, different goals, different financial situations, etc... Therefore, every client needs to be handled differently and a mortgage needs to be obtained that is the right fit for them and their particular financial situation.
Just a few of the questions that will help determine what might be the best mortgage for you are: How long am I likely to live in this home? How stable is my income? (both on a month to month basis, but also long term) How much cash do you plan to put down? Are you comfortable with the possibility that your interest rate could adjust in a few years?Do you want the lowest interest rate, or the lowest payment possible.
Mortgage Loan Categories
Most loans fall into three categories: fixed-rate, adjustable-rate, and features of both.
Fixed-rate mortgages are the most common mortgage for first-time homebuyers because they're stable. Typically the monthly mortgage payment remains the same for the entire term of the loan – whether it's a 15-year, 20-year, or 30-year mortgage – allowing for predictability in your monthly housing costs.
Adjustable-rate mortgages (ARMs) Unlike a Fixed-rate mortgage is an adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes. Each ARM is linked to a specific index, one, three, and five-year Treasury securities. The margin, interest rate, represents the lender's cost of doing business plus the profit they will make on the loan is added to the index rate to determine your total interest rate. It usually stays the same during the life of your home loan. The adjustment period is the period between potential interest rate adjustments.
Hybrid loans: Most homeowners understand the difference between fixed-rate and adjustable-rate mortgages (ARMs). A hybrid mortgage, as its name suggests, combines the features of both. It starts off like a fixed-rate mortgage, with a stable interest rate for up to ten years. But then it converts to an ARM, with the rate being adjusted every year for the remaining life of the loan.
- How does it work?
- On mortgage charts you’ll see hybrids referred to as 3/1 or 5/1, and so on. The first number is the length of the fixed term -- usually three, five, seven or ten years. The second is the adjustment interval that applies when the fixed term is over. So with a 7/1 hybrid, you pay a fixed rate of interest for seven years; after that, the interest rate will change annually.
Balloon Payments:
A balloon payment occurs when a loan is not amortized. It is generally an early due date, involving the payoff of an existing loan balance. Interest-only loans, also known as straight notes, generally contain a balloon payment provision. A loan may be amortized for 30 years, but due and payable in five years. This means the buyer will make amortized payments, based on a 30-year payment plan, but the loan balance will be due in five years instead of 30, resulting in a balloon payment.
FHA: The Federal Housing Authority will guarantee a lender payment of the loan if the borrower defaults. The guarantee is charged to the borrower in the form of a mortgage insurance premium that is collected both upfront and monthly. There are no income limits for qualifying for an FHA loan like those found in conventional first time home buyer programs. But, there are limits on how much you can borrow. Loan sizes are limited to small mortgages that are relative to home prices in your area. You need a reasonable debt to income ratio that is greater than 29/41. Plus a good credit rating.
- Low down payments with as little as 3.5 percent
- No prepayment penalties
- Loans are assumable
- Offer flexible guidelines with respect to down payment, credit and ratios
VA: Loans are offered to eligible veterans. A veteran must supply the lender with evidence of honorable discharge from the military in order to be considered a qualified veteran. Additionally, veterans are only allowed to have one VA loan. Veteran spouses are also eligible for financing. Lenders are provided with a government guarantee to offer the program to veterans. There is a funding fee associated with all VA loans that is typically financed.
- Home choices include a new or existing single family home, townhouse, condo (VA approved project), manufactured home and lot as well as certain kinds of home improvements.
- No down payments – 100 percent financing is available on many loans
- No prepayment penalties
- No Private Mortgage Insurance (PMI).
- No penalties if you prepay the loan.
- Interest rates are competitive.
- Flexible qualification standards:such as ratio and downpayment requirements.
WCDA: This is a state program to help first time home buyers with low and moderate incomes to purchase a home in the State of Wyoming, at below market interest rates. learn about this program here.
… View and Print the Residential Loan Application here.
… Download Resident Loan Application here.
OR … To apply on line through Wallick and Volk, Joanne Demorest, she will immediately process your loan application and get in touch with us on the best loan options for you!
OR … Give me a call and I will be happy to get you pre-qualified.
Contact us for more info
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