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Hi, I’m Brian Maguire and you’re watching East Coast Mortgage TV. Today in Part One
of this two part video series I’m going to give you an overview of the five mortgage
loan categories!
There are many types of mortgage programs available. The right type of loan for you
depends upon several factors including: * Your current financial picture.
* How or if you expect your finances to change. * How long you intend to keep your house.
* How comfortable you are with the possibility your mortgage payment may change in the future.
When considering loan programs, the first decision is usually if you prefer a fixed
rate mortgage or adjustable rate mortgage. For example, a 15-year fixed rate mortgage
can save you thousands of dollars in interest payments over the life of the loan, but your
monthly payments will be higher. An adjustable rate mortgage may get you started with a lower
monthly payment than a fixed rate mortgage, but your payments could increase when the
interest rate changes.
There are 5 major categories of mortgage loans which include
Conventional/Conforming which require good to excellent credit, have a 417 thousand dollar
loan amount limit and No Mortgage Insurance if there is at least a 20% down payment.
Jumbo Loans are another type which require Good to Excellent Credit, loan amount over
417 thousand dollars and higher down payments and Equity Required.
FHA loans Allow for lower credit scores, Lower down payments and Equity requirements and
have a higher cash out refinance option.
This cash out refinance option is a refinance transaction in which the new loan amount exceeds
the total of the principal balance of the existing first mortgage and any secondary
mortgages or liens, together with closing costs and points for the new loan. This excess
is usually given to the borrower in cash and can often be used for debt consolidation,
home improvement, or any other purpose. The borrower effectively borrows against the home’s
available equity.
VA Loans are available to qualified Veterans. No Down Payment is required and can be 100%
financing. These loans also have the highest cash out available on refinances.
USDA loans are given for Rural Properties and No Down Payment is required
So there we have it, a general overview of the different types of loan programs. Be sure
to watch Part two of this video series that provides detailed information about many different
types of mortgage loans. Thanks for joining me and make it a great day!