ADJUSTABLE RATE MORTGAGE LOANS (arms) features a variable interest rate which is periodically adjusted. ARMS may provide the security, flexibility and afford ability prospective home buyers desire. These loans are especially attractive to home buyers who plan to trade up in future years. The "ARM", is also used to qualify the borrower for a higher loan amount based on future earnings or current debt reduction. Generally, initial interest rates are lower than on fixed rate mortgages.

CONVENTIONAL LOANS are mortgages that are not covered by any government program of insurance or guarantee. Such loans may be eligible for purchase by the major secondary market agencies Fannie Mae and Freddie Mac which offer standardized underwriting guidelines for conforming loan amounts up to $417,000. These loans can carry fixed or variable (ARM) rates and a variety of repayment terms that can be tailored to your individual needs. Down payment requirements may be as little as 3%, although loans with less than 20% down require mortgage insurance. These loans may or may not have prepayment penalties.

FHA LOANS are ideal for first-time home buyers and those low-to moderate-income borrowers. Loans are insured by the Federal Housing Administration. Down payments may be as little as 2.5% and the loans are assumable with release of liability to the original borrower. (In most instances, "Grant Money Funds" are available that eliminates the required 2.5% down payment, providing the Seller is willing to make a 3-4% contribution to the fund). 

NON CONFORMING JUMBO LOANS are for borrowers who exceed the $417,000. conforming loan amount, 1st USA offers a variety of mortgage options which will meet your needs. So-called non-conforming jumbo loans may be up to $1.0 million and can be either fixed or adjustable rate mortgages. Underwriting guidelines may vary depending on program selected, down payment and actual loan amount. Repayment options also vary, enabling you to select a mortgage that fits your budget.

Typically, Jumbo loans carry slightly higher rates of interest than Conforming loans. This is because Conforming loans are typically sold by lenders to FNMA (Fannie Mae), which, because of FNMA's status as a government-backed organization, provides credit enhancement to the loan, which, in turn, means that investors and lenders are more willing to accept a lower rate of interest in return for this government enhancement. Since Jumbo's are ineligible for sale to FNMA, lenders generally require slightly higher rates as compensation for this lack of government backing.

125% CLTV LOANS is one of the fastest growing mortgages programs. The 125% Combined Loan to Value Loan or its universal name 125% CLTV, Simply put, is a home equity loan which added to the existing balance of the home loan can not exceed 125% of the current value of the property. E.g. A home is valued at $100,000. 125% of the value equates to a combined loan of $125,000 ($100,000 X 125% = $125,000). Say the first mortgage balance is $90,000. Then a borrower could be eligible to receive a home equity loan up to $35,000 ($125,000 - $90,000 = $35,000).

The program was originally designed as a home improvement loan. Over time, it developed into a multi purpose type loan, allowing for home improvements, debt consolidation, major consumer purchases and even cash-out. Today, the majority of 125% CLTV loans are used for debt-consolidation and cash-out.

Additional savings may be materialized in tax savings. As this loan is classified as a home equity loan, some or all of the interest payments may be tax deductible. Please consult with your Tax Preparer.

FEATURES:

* Fixed rate - fixed payment loans from $10,000 to $100,000

* Your choice of payment terms from 1 year to 25 years

* Loans under $35,000 need no appraisal

* Funds can be used to consolidate debt, home improvements or cash out

 BENEFITS:

* Consolidate Debts - make one payment instead of several - save hundreds of dollars monthly

* Make home improvements including luxury improvements such as swimming pools, hot-tubs, etc.

* Get Cash - for vacations, tuition, investments (other than real estate)

* Fast & Easy

* Little to No Out-of-Pocket Expense

* Fast Approvals

* Quick Closings

VA LOANS: are available to individuals who have served or are currently in the U.S. Armed Forces that meet eligibility requirements. VA mortgages may be provided with no down payment requirement, making them ideal for first-time borrowers. Loan amounts may vary depending upon the Veterans entitlement. and are qualifying assumable with release of liability. There are no penalties for prepayment.

VA guarantees loans made to veterans and un-remarried surviving spouses for the purchase or refinancing of homes, condominiums and manufactured homes. VA guarantees part of the total loan, permitting the veteran to obtain a mortgage with a competitive interest rate, even without a down payment if the lender agrees.

VA requires a down payment for the purchase of a manufactured home. VA also requires a down payment for a home or condominium if the purchase price exceeds the reasonable value of the property or the loan has a graduated payment feature.

SECOND MORTGAGES AND EQUITY LINES OF CREDIT are a second mortgage loan secured by your home in addition to your first mortgage.

1. Home Equity Loan: As you make monthly mortgage payments, the value of your home increases because you are reducing your mortgage balance. At the same time your neighborhood is probably appreciating in value, and you notice that the same or similar homes are selling for much more then you paid for your home. The difference between what your home is valued at, and the amount your owe (mortgage balance) is your equity.

2. A loan can be made against this equity. This can be either a fixed period loan or a credit card-like line of credit known as a Home Equity Line Of Credit (HELOC). Loan proceeds can be used for any thing at any time. 

3. Home Improvement Loan: This is typically a fixed period loan, which may add more value to your property. Proceeds are often used for a new roof, room, swimming pool, or structural repair to your home. This type of loan can be for the equity in your home or for an amount greater then the value of your home. 

Second Mortgages Offer Many Benefits over Other Types of Loans:

  • Tax advantages: interest is usually deductible (consult your accountant to make certain);

  • Favorable interest rates: rates will vary by product and situation;

  • Loan Amounts up to $100,000;

  • Debt consolidation and Cash out options;

  • No out-of-pocket closing costs;

  • Long terms and low monthly payments.

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