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Courtesy Financial... fixed rate mortgage options
 Conventional Fixed Rate Mortgage
(30 or 15 year amortization)
This is a
conventional loan
that conforms to the guidelines set by Fannie Mae and/or Freddie Mac. All these loans meet the guidelines for income, credit history,
debt to income ratio.
A conforming loan is a loan that is underwritten according to guidelines defined by the Federal Home Loan Mortgage Corporation (Fannie Mae). Conforming loans are limited to a maximum $417,000 for a single family residence. Higher loan amounts are available for two-unit, three-unit and four-unit residences. The Conforming Fixed Rate Mortgage is fully-amortized with no pre-payment penalties or balloon payments; it is available with a 15-year or a 30-year term.
The Jumbo Fixed Rate Mortgage
(30 or 15 year amortization)
Borrowers with financing need exceeding the $417,000 maximum loan amount of Conforming loans can still have the advantages of a Jumbo Fixed Rate Mortgage, with loan amounts up to $4,000,000 - even more in some cases. The conditions and qualification requirements on a Jumbo loan are typically similar to those on a Conforming loan. However, lenders usually charge slightly higher rates and fees for Jumbo Fixed Rate Mortgages because they consider the higher loan amounts to be a greater
risk.
The 5 and 7 year Balloon Programs
(30 year amortization)
These mortgages are fixed for a certain period of time (usually
5, 7, or 10 years) and then become 100% payable, meaning you must
either make a final balloon payment or refinance. Balloon mortgages are usually amortized over 30 years. The advantage of balloon mortgages is that they
have a fixed rate which is usually lower than a straight 30 year
Fixed Rate Mortgage. The disadvantage is that if you do not sell your house in 5
or 7 years, you must refinance or pay off the loan balance. Many
lenders offer a Conversion Option. This will convert the remaining principal balance to an adjustable rate mortgage for the remaining term (example:
for a 7 year balloon mortgage, the remaining term would be 23
years) with no balloon payment due.
Fixed Rate Second Mortgage
(15 or 20 year amortization)
Homeowners may qualify for many loan options that will allow the
release of trapped equity in a home. This could convert a fixed real estate asset into
money needed to consolidate high interest rate credit cards and
other consumer debt. Lower your monthly payments, lower the interest
rate on the debt and, in most cases, increase your tax shelter
with tax deductible interest (consult your tax accountant for
details). This "liquid equity" could also be used for home improvements,
a new car, investments, college tuition, or for any reason.
An Equity Loan is usually structured as a fixed amount borrowed
(one time dollar amount request) with a fixed interest rate and a fully amortized term.
The Credit Line Second Mortgage
(15 year amortization)
An Equity Credit Line enables you to write yourself a loan by writing individual
checks drawn against your available secured credit line. Your
credit limit is determined by taking your home value and subtracting
the existing outstanding principal balance of your first mortgage. The Credit Line interest rates vary depending
on the extent of your overall loan to value (your maximum credit line available). You can use your credit
line for any purpose and you pay interest only on your outstanding
balance. The interest that you pay on a credit line may also be
tax deductible (please consult your tax accountant for your specific
situation).
Courtesy Financial is centrally located to serve all areas of California, with its main office location in San Jose, California. Email us today |
