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Probably the most common of all conventional mortgages: the 30 year loan. Thirty years is a long enough time for buyers of multiple ages to be able to consider the loan and also it makes monthly payments much more manageable!

A 30 year fixed rate loan is exactly what it sounds like. The length of the loan is thirty years and the interest rate doesn’t change during the life of that loan 1(30 years). These loans are very popular, especially for those looking to purchase their forever home as the life of the loan is so long.

One issue that arises is qualifying for said loans as they’re not under any sort of program. The fixed part of the loan is also hard to swallow sometimes when interest rates are high. However, the stability the loan offers often outweighs the minimal cons!

Because the interest rate for this loan is fixed for three decades, it’s important for buyers to do what they can to lower their interest rates as much as possible. The two factors buyers have control over are their down payment and their credit score. So, when buyers are looking to purchase a home and utilize this common loan type, it’s best to put down as large of down payment as one can afford and work on keeping their credit score as high as possible.

That being said, take time to get prepared and ready to make the best purchase possible and settle into your home and mortgage for the next several years!

Wanting to own your home faster? Buying a property well within your budget? A 15 year fixed mortgage might be right for you!

A 15 year fixed mortgage offers the same benefits of a 30 year loan — a fixed rate, set monthly payments, etc. but is paid in full in half the time. That means you own your home in 15 years! That also means — your monthly payments are much higher. This may not be a bad thing though for some buyers! If purchasing a home well within budget and with smart financial planning; 15 years can be perfect timing!

There can be minimal interest rate differences also between 30 year and 15 year loans which is another selling point for 15 year loans. While 30 year loans are by far the most popular, it’s worth taking a look at 15 year mortgages. Interestingly enough, the cost at the end of the day between a 15 year vs 30 year loan ends up being lower for a 15 year loan because of the double amount of time that the interest has to grow for a 30 year loan.

If one can afford the monthly payments for a 15 year loan — that’s often the best bet. It’s important either way though to really look at your finances and future financial goals in order to decide what length of mortgage is best for you.

Adjustable rate mortgages are loans that have interest rates that change on a schedule throughout the length of the loan. When a loan is first established, the interest rate of an ARM is lower than the average market rate at that time. Most commonly, buyers get an adjustable rate mortgage and then refinance when the “schedule” changes or “fixed” time period ends. Why? Because while an adjustable rate mortgage initially gives buyers a lower interest rate — that interest rate can and will change throughout the life of your loan.

Other than a plan to refinance in the future, buyers might also choose an ARM loan because they don’t plan on living in their home for very long (shorter than the fixed rate period usually) or they know they’ll earn significantly more money in coming years.

So how does this “fixed rate” time period work before the interest rate is adjusted? Typically, the interest rate changes every six to twelve months, but it can change as often as every month! Often, a loan will have a larger chunk of time where it’s fixed initially. So, five years of fixed and then a rate that changes yearly would be signified as 5/1. A fixed loan for three years and then changing every year would be a 3/1 and so on and so forth. The most common ARM loan time periods are 1/1, 3/1, 5/1, 5/5 (adjusting every five years), 7/1 and 10/1.

Time and money really are the key factors for deciding if an adjustable rate mortgage works for you and we will work with you to make sure we make the best decision.

FHA stands for the Federal Housing Administration. An FHA loan is what allows buyers who can’t come up with a hefty down payment and/or have “lower” credit scores to qualify for a mortgage loan. The basic criteria for an FHA loan is 3.5% minimum down payment and a credit score of 580 points or higher.

Only certain lenders are able to give FHA-insured loans so be sure to check with yours! Having a loan backed by the government (like the FHA loan) is popular for first time buyers as they are oftentimes easier to get than a conventional loan. Why? Easy — the criteria listed above opens the home-buying pool to a lot more people than only those who can put down 10 or 20 percent for a down payment.

There are specific types of FHA loans that your lender can go over with you if you decide an FHA loan is right for you. While deciding what type of FHA loan works for you, it’s also important to note certain limits on FHA loan, namely how high of price they are willing to cover.

Common types of FHA Loans:

• Fixed Rate Loans
• Adjustable Rate Mortgages
• FHA 203 Loans
• FHA Jumbo Loan

VA Loans are reserved for veterans, active-duty military, veterans, and spouses! The U.S. The Department of Veteran Affairs backs VA loans financially. VA loans are very popular because they require no down payment and have low interest rates — truly a great deal. Additionally, VA loans have lower closing costs which can save buyers a lot of money!

VA Loans are typically offered in 15 year loans or longer because the goal is to offer those who are serving or have served our country, long term stability. While the US Department of Veteran Affairs has no required down payment or credit score — most lenders who work with VA loans do require a credit score in the mid 500’s or higher. If this doesn’t apply to you, don’t worry — there’s always ways to figure it out! It’s worth noting that on average with a 30 year VA purchase loan, the interest rates are lower than non-VA loans.

There are multiple loan options available for VA loans:
→ VA purchase loan
→ VA cash-out refinance (mostly used to pull cash out of the home for equity!)
→ Loans that give the ability to renovate (similar to refinancing)
→ VA streamline refinance (no cash out, but lower interest rates)

There aren’t a lot of disadvantages when it comes to these loans. One however is that while VA loans don’t require closing costs, there are funding fees that account for the cost of foreclosure if the buyer fails to make their mortgage payments. Also, properties must be in decent condition to qualify for a VA loan.

If you qualify for a VA loan program, thank you for your service and we can’t wait to work with you to see what best suits your needs!

Paying a mortgage every month can be hard, or impossible, even for buyers with the best laid plans. Life happens, the market changes, and sometimes homeowners simply aren’t able to make ends meet and end up close to or completely “upside down” on their mortgage — owing more than the home is worth.

Jumbo loans are exactly what they sound like — large loans for expensive homes. They differ by amount from state to state and are not secured by Freddie Mac or Fannie Mae. In most counties/states, homes over $548,250 require a jumbo loan (this of course differs in areas of higher-cost homes). For reference, if you hear the term non-conforming loan or non-conforming conventional loan — it’s the same as a jumbo loan. To qualify for a jumbo loan, buyers must have a low debt to income ratio (under 43% but aim for 36%) and a very high credit score (over 700). These loans also require all of the other loan requirements like proof of income and assets to cover payments, paystubs, etc. Sometimes, buyers must prove they have enough cash on hand to cover a year of mortgage payments.

Down payments required for a jumbo loan used to be closer to 30% of the home price. Now, they are usually within the range of 10-15 percent of the home price but closer to 20% is always better. While APR (annual percentage rates) used to be higher for jumbo loans, recently they’re similar to the APR rates of conventional loans. Closing costs may be higher with a jumbo loan because there is more money on the table in the first place. If you’re in a position to purchase a high-dollar home and have the assets to do so — a jumbo loan is probably the right route for you and your lender can assure you of this.

There are more loan types out there and Part 2 of this series will be coming soon, so stay tuned! If you need more information sooner — give us a call and we’ll get you set up!

Have you ever wondered if you could get a loan for a fixer-upper without having an immense amount of capital? There’s another type of FHA loan out there for you! A 203k loan is exactly that and allows buyers to roll the costs of the renovation into your mortgage! So, buyers can either refinance or freshly purchase a home that requires larger renovations and get a loan that covers both! Before you get too excited though — it’s important to note that more luxurious renovations like a pool, for example, are not covered under a 203k loan.

If a home that you’re considering buying, or maybe currently own, needs a new bathroom or laundry room, etc. but the price of the home plus the renovations is out of reach — that’s where a 203k loan steps in. Because this loan is still an FHA loan, down payment requirements can be minimal and therefore, doable.


There are two main types of 203k loans — limited/streamline and standard.
A limited/streamline loan offers up to 35,000 for repairs and renovations as long as they are not large structural repairs.

A standard loan does allow for major structural repairs, the repairs must be at least $5,000 dollars, and buyers must work with a HUD consultant during the renovation process.

Sound too good to be true? Here’s how it works! In most cases, the loan functions in one of two ways:
The loan provides breathing room or funds up to six months or so of mortgage payments so you can live elsewhere while you’re remodeling, but still pay the mortgage payments on the new home. Large renovations and where to live is the biggest issue homeowners face and this provision solves that! Up to 20% contingency reserve just in case the estimated cost for revision is low (another common issue)
If a 203k loan sounds like it solves your problems — sit down with your lender and let’s talk about the details!

USDA Loans are for those who are purchasing a home or property in a rural area. These loans can offer up to a 100% financing but depend, of course, on the buyer and the home in question!

USDA loans are backed by the U.S. Department of Agriculture. These loans are designed for those who live in rural areas, often with livestock (but not required), and who make a living wage on the low to average side with credit scores in the mid six-hundreds or higher! Grant money and gifted money can also apply towards buying a home with a USDA loan, which opens even more doors.

97% of the United States is USDA eligible so don’t be discouraged thinking your desired area may not qualify. Rates and loan amounts also change based on where you’re looking to buy as they fluctuate with the market one is looking at.

There are multiple types of loans buyers can apply for under a USDA loan and all fall under three main categories:
Home Improvement Loans and Grants: these can be combined and offer buyers financial help up to 27,500 to upgrade or repair their homes in rural areas.
Direct loans: Geared towards low income borrowers, these loans have interest rates as low as 1%.
Loan guarantees: The most standard option. The USDA backs loans given by lenders with low interest rate and low to no down payments.

Do you qualify for a USDA Loan?
→ Purchasing a home in a rural area
→ Low to moderate income
→ US Citizenship or Permanent Residency
→ Lower debt to income ratios or a credit score about 680
→ A steady job

Paying a mortgage every month can be hard, or impossible, even for buyers with the best laid plans. Life happens, the market changes, and sometimes homeowners simply aren’t able to make ends meet and end up close to or completely “upside down” on their mortgage — owing more than the home is worth.

The Home Affordable Refinance Program, HARP, is in place for homeowners like those mentioned above. It’s a secure federal loan program with a strong reputation among financial gurus. Long story short: HARP is a great option for struggling homeowners because it allows them the potential to refinance without mortgage insurance or down principle — thus giving them the breathing room they so desperately need.

Lowering the interest rate on your mortgage and refinancing would effectively solve your financial problems — but you’re almost behind on payments, owe too much, or can’t afford the fees that come with refinancing and so, you aren’t able to refinance the typical way. This is where HARP comes in. You can even switch from an adjustable rate mortgage to a fixed rate mortgage to ensure you’ll be just fine for the remaining life of your loan.

Reverse mortgages are in place for owners ages sixty-two and older. These loans allow owners to pull out the equity in their home in order to pay off their mortgage sooner — and if there’s money leftover, it’s theirs!

Oftentimes, one’s net worth is largely caught up in their home and by pulling out their equity in either one lump sum or in monthly payments — owners can pay down their mortgage and gain more flexibility.

Reverse mortgages are a certain type of FHA loan which means they’re backed federally, giving these owners more security. The way it works is that when an owner moves or dies — the reverse mortgage funds goes to the lender and whatever is left over goes either to the still-living owner or to their beneficiaries.

When you take out a reverse mortgage, you can choose to receive the proceeds in one of six ways:
Term payments: The lender gives the owner/borrower equal payments monthly for a set period of time.
Lump sum: The only option that comes with a fixed interest rate. One large chunk when the deal closes.
Line of credit: Borrowers can get money as needed and only pay interest on the amount taken out.
Equal monthly payments: Similar to term payments. As long as at least one borrower lives in the home, the lender gives them steady monthly payments.
Equal monthly payments plus a line of credit: The same as above but with a line of credit available should the need arise.
Term payments plus a line of credit: The lender gives the borrower equal monthly payments for a set period of time. If more money is needed, a line of credit is available to access.

To qualify, owners need about 50% equity in their home to typically secure an HECM (Home Equity Conversion Mortgage) which is the most common type of reverse mortgage. HECM is offered for homes $765,600 and below — homes valued above that require a jumbo reverse mortgage or a proprietary reverse mortgage.

Reverse mortgages can be great options for elderly clients who need more flexibility and we can walk you through every step of the way to see what works best for you!