VA Loans
The Veterans Administration guarantees mortgages for veterans of armed services. A down payment is not required for the purchase of a home and the seller can pay for all of the veteran’s closing costs. VA guidelines allow for greater credit flexibility and qualifying ratios. As with an FHA loan there is a maximum loan amount and varied loan programs available.

Conventional Loans
Conventional loan programs are those without insurance or guarantee by a federal agency. If a borrower is putting less than 20% down, private mortgage insurance(PMI) is required. The rate for PMI will vary depending upon the loan to value, loan type and the term of the loan The maximum loan amount for a conventional loan is $359,700.

Jumbo Loans
These are loans in amounts over $359,701.

Construction-Perm Loans
Borrowers who desire to have a custom home built on a lot they have purchased will need a construction-perm loan. This provides the builder with a series of draws until the construction is finished. Loan payment during construction is typically interest only. Upon completion the loan converts to a permanent mortgage with a full PITI payment.

2nd Mortgage/Home Equity Loans
Borrowers who wish to capitalize on the equity of their property will use an equity loan to pay off debt or improve their home.
 

Loan Programs

Advantages

Disadvantages

Fixed Rate Mortgages 15 year/30 year	*Fixed monthly payment and rate protect against interest and monthly payment increases	*Higher interest rate compared to ARM introductory rates *If plan on not moving or re-financing in foreseeable future, might want long term fixed rate but if anticipate being in property for short term or if trying to improve credit in anticipation of re-financing at a lower rate, avoid long term fixed.
Adjustable Rate Mortgages (ARM) 1 month, 6 month, 1 year, 2/28-2 year fixed/28 year ARM 3/1, 5/1, 7/1, & 10/1	*Lower initial monthly payments *Lower payment over a shorter period of time * May qualify for higher loan amounts * Rates & payments may go down if rates improve	*More Risk * Payments may change over time *Potential for high payments if rates go up
Balloon Mortgages	*Lower initial monthly payments *Lower payment over a shorter period of time *Many balloon mortgages offer the option to convert to a new loan after initial term	*Risk of rates being higher at the end of the initial fixed period *Risk of foreclosure if can not make balloon payment, re-finance or exercise the conversion option
No Income or Stated Income/Asset programs	*No tax returns or W-2’s *No proof of assets or down payment *No verification of income *Faster approval	*Higher rates/Points *Higher down payment
No Point, No fee programs	*No closing costs *Less money required to close	*Higher rates *Higher payments
Home Equity Line of Credit	*You only borrow what you need *Pay interest only on what you borrow *Access to funds as needed *Interest may be tax deductible *Up to 125% Loan to Value	*Rates can change, the maximum interest rate is normally high *Payments can change *Harder to refinance your first mortgage
Home Equity Fixed Loan	*Fixed payments *Receive one lump sum at closing *Interest may be tax deductible	*Higher interest rates compared to 1st mortgages *Harder to refinance your 1st mortgage