Types of Loans Available
When it comes to finding a mortgage, the possibilities are endless. However, being overwhelmed by choice doesn’t mean you should take whatever is offered to you first. Contact me for information about different types of mortgage loans and I’ll be happy to explain them and help you find one that suits your needs and preferences.
Fixed Rate Mortgage
A fixed rate loans is a loan in which the interest rate charged remains fixed for the loan’s entire term, no matter what happens with interest rates. With a fixed rate loan, the payment is unchanged for the life of the loan. Whether or not the fixed rate is best for you depends on a number of factors.
If you opt to go with a fixed rate loan, your rate will be based on the prevailing market interest rate, plus or minus a spread. Many borrowers pursue fixed rate loans when interest rates are low but may increase within the foreseeable future. This ensures a relatively low payment compared to what may have happened had the rate gone up significantly. On the other hand, if rates are higher but may come down in the foreseeable future, a variable rate may result in paying less. Depending on the terms of your agreement, your interest rate on the new loan will remain fixed, even if interest rates climb to higher levels. On the other hand, if interest rates are on the decline, then it would be better to have a variable rate loan. As interest rates come down, so will the interest that you pay.
Rather than stress over the best type of loan for you, why not speak with one of the experts at EHLFunding? We make it our business to provide our clients with the information they need to make the best choice for their situation.
Adjustable Rate Mortgage
An adjustable-rate mortgage, also known as an ARM, is a loan with an interest rate that can change periodically. With ARMs, the monthly payments may go up or may go down. Many borrowers choose ARMs because the monthly payment is generally lower than with a fixed rate loan. The potential downside to this is that the rate can change unexpectedly. In some cases, the monthly payment goes down. Some borrowers that choose an ARM later refinance for a fixed rate if interest rates begin to rise. This allows them to lock-in at a specific rate, while still having benefited from the lower payment that ARMs make possible.
If you’re in doubt about the best loan for your situation, EHLFunding is ready to help.
Jumbo Loans
Most counties within California have a 2017 conforming loan limit of $424,100 for a single-family home. Higher-priced areas, like those in the San Francisco Bay Area, have conventional limits of up to $636,150. Other counties fall somewhere in between these “floor” and “ceiling” amounts.
If you’re seeking a Jumbo Loan, EHLFunding can help. we look forward to speaking with you.
Refinance
Refinancing is the process of replacing an existing loan with a new loan. Many borrowers refinance with their existing lender, whereas others refinance with a new lender. Many people refinance to lower their payment if interest rates have come down, or to pull money out of their home if they have accumulated equity. The money pulled out can be used to payoff bills, renovate the house, pay for education, or virtually anything else.
In some circumstances, borrowers refinance to pull money out and lower their payment at the same time. This is possible if the borrower has had their existing loan for an extended period of time and when interest rates are low.
Refinancing is an attractive provision that comes with home ownership.
Rennovation
Fannie Mae and the Federal Housing Administration offer attractive home renovation mortgage programs that allow buyers to borrow based on what the house is expected to be worth after the home renovation is complete. Homeowners can also use these programs to refinance their existing mortgage plus the renovation costs into one loan.
If you are planning a renovation project, EHL Funding is ready to find the right program for you.
FHA
An FHA loan is a mortgage issued by a federally qualified lender and insured by the Federal Housing Administration(FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.
As of 2017, FHA loans allow the borrower to borrow up to 96.5% of the home’s value. The 3.5% down payment can come from a gift or as a grant. These features make FHA loans extremely attractive to first-time homebuyers.
FHA loans are also attractive to borrowers with less than perfect credit. FHA loans are offered to borrowers with low income and who have a credit score as low as 500. The higher the credit score, the lower the down payment requirement is for an FHA loan.
If you’re in doubt about the best loan for your situation, EHLFunding is ready to help.
Veterans Affair Loan
A VA Loan is a mortgage option that is available to United States Veterans, Current Service Members and spouses that have not remarried. VA Loans are issued by qualified lenders and guaranteed by the U.S. Department of Veterans Affairs (VA).