These are the basic highlights of just some of the purchase programs available.
(All programs are subject to change without notice)
FHA Purchase - 3.5% minimum down payments
- Closings within 7 to 10 business days
- Up to 3% seller concessions
- All property types will be considered
- Primary residence only
| VA (Veterans) Purchase - 100% financing (ZERO down)
- Closings within 7 to 10 business days
- All property types will be considered
- Up to 6% seller concessions
- Primary residence only
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Conventional Purchase - Down payments as low as 5%
- the home path program!
- Up to 95% financing including 2nd homes
- Investment up to 75% Financing
- Closings within 7 to 10 business days
- All property types will be considered
- Up to 6% seller concessions
| Foreign National Purchase - 30% down payments
- Dade, Broward, and Palm Beach counties only
- Primary & 2nd home purchase 6% max seller concession
- Investor 2% max seller concession
|
The Advantages and Disadvantages of different loan programs.
These Loan programs are just basics for conforming Fannie Mae / Freddie Mac / FHA
Fixed Rate Mortgages
Advantage
No Pre-Payment Penalties
30 year fixed
15 year fixed
10 year fixed
Monthly payments are fixed over the life of the loan
Interest rate does not change
Protected if rates go up
Can refinance if rates go down Higher interest rate
Disadvantage
Higher mortgage payments
Rate does not drop if interest rates improve
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ARM= Adjustable Rate Mortgages
These ARM's are "conforming" NOT subprime.
Positives
No Pre-Payment Penalties
10/1 ARM
7/1 ARM
5/1 ARM
3/1 ARM
1 year ARM
6 month ARM
1 month ARM
Lower initial monthly payment
Lower payment over a shorter period of time
May qualify for higher loan amounts
Rates and payments may go down if rates improve
Disadvantage
More risk
The maximum the rate can ever go up is 1% over the start rate per year.
The lowest the rate can go is the start rate.
The highest the rate can adjust for the life of the loan is a total maximum increase of 5% of the start rate.
Payments may change over time
Potential for high payments if rates go up
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Balloon Mortgages
Advantage
Lower initial monthly payment
Lower payment over a shorter period of time
Many balloon mortgages offer the option to convert to a new loan after the initial term.
Disadvantage
Risk of rates being higher at the end of the initial fixed period
Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
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First Time Buyer
Advantage
Lower down payment
Easier to qualify
Lower rates
Disadvantage
May be subject to income and property value limitations
Some programs which have government subsidies may have a recapture tax if you sell the house too early.
PLEASE CONSULT WITH YOUR TAX ADVISOR OR TAX PROFESSIONAL.
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Stated Income
HARD EQUITY ONLY
Advantage
Don’t need to verify income
Disadvantage
Higher down payment
For property investors only
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No point, No fee Programs No closing costs
Advantage
Less money required at closing
Disadvantage
Higher rates
Higher payments
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Imperfect Credit Programs
Advantage
Potential for reestablishing credit if you pay your mortgage on time.
When used for debt consolidation, you may be able to reduce your monthly debt obligation payments
Disadvantage
Higher rates with terms that may not be as favorable
Harder to get long term fixed loans
Loans may have prepayment penalties
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Home Equity Line of Credit
Advantage
You only borrow what you need
Pay interest only on what you borrow
Flexible access to funds
Free option to convert to Fixed Rate
5 Year Draw 10 Year Repay 15 Year Term
10 Year Draw 15 Year Repay 25 Year Term
15 Year Draw 15 Year Repay 30 Year Term
Disadvantage
Variable Rate
The maximum interest rate is normally high
Payments can change
Harder to refinance your first mortgage