Types of Loans

Loans and Terms constantly change with economic conditions, but the following is a summary of many of the types of loan offerings in existence. 

Conventional A type of mortgage not obtained under a government insured program.  This loan is secured by investors.  Generally, you may obtain a Conventional Mortgage up to 97% Loan to Value.

Mortgage Insurance may be required if your Loan to Value is in excess of 80%.

VA A type of mortgage that is secured by the government for people that have served in the armed forces.

Requires VA Funding Fee of 1.5-3.0% to be paid.  This fee can be rolled in to the loan amount or paid up front.

Up to 100% Loan to Value

FHA A mortgage that is secured by the Federal Housing Administration under HUD.

An Upfront Mortgage Insurance Premium is required in the amount of 1.75% of the loan amount which is rolled into the loan.  Monthly Mortgage Insurance is also required in the amount of .55%-1.35% (based on LTV) of the loan amount annually.

Up to 96.5% Loan to Value or 100% w/ the simultaneous use of a gift program.

Adjustable Rate A program where the interest rate is generally fixed for a certain period (1, 3, 5, 7, 10 years) and then can adjust every month, 6 months, or year.
Fixed Rate A program where the interest rate is fixed for the entire life of the loan.
Balloon Payment A program where the loan is typically amortized over 30 years but is due and payable at the end of a certain term, generally 5 or 7 years.  When the loan is due and payable, the term may be extended or rolled over in to a different program.
Graduated Payment A program where the monthly payments start at a lower rate than standard fixed rate loans and increase by a pre-determined amount each year.
Community Homebuyer’s A first time homebuyer program with a fixed rate and low down payment requirement ($500 – 5%).  There are no cash reserve requirements and qualifying ratios are easier than FHA loans.  The buyer must complete a home-buyer training class.
Reduced Documentation This is a conventional loan program where the borrowers are not required to document their income, assets or even employment for a slightly higher interest rate.

These programs are few and far between, but they ARE still available up to limited Loan to Values – 60-70%.

About luxpropertygroup

Lux Home Group consists of FULL TIME real estate professionals in the Phoenix area. Real Estate is not only our job, it is our passion. So, if you are interested in buying, selling, or renting a home in the greater Phoenix Metropolitan Area, or you would like to get involved in the fabulous world of real estate sales or investing, give us a call at 480.442.1442 or email us at info@listingsbylux.com. If you just want to hang out with some super fabulous people...you can call us for that, too.

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