LOAN PROGRAMS
Mortgage Shoppers are understandably concerned about interest rates, but many folks underestimate the importance of choosing the right mortgage too. In fact, some loans with lower interest rates have higher monthly payments because of the government required mortgage insurance associated with the loan program itself!
The truth is that mortgages are complex financial instruments and shopping for a home loan isn’t as easy as shopping for a credit card or auto loan. The right or wrong choice can change your financial future. Just ask any of the 1000’s of folks who lost their homes due to the mortgage meltdown. You’ve seen it all over the news… unethical or (or uneducated) mortgage sales folks peddling mortgages with microscopic print and mysterious terms… and with these loan programs often came very, very, low interest rates.
Here are some of our most popular loan programs available in Idaho:
VA Loans are “guaranteed” by the Veteran’s Administration for eligible veterans. A funding fee is paid to the Veteran’s Administration, but is waived for qualifying disabled Vets. The funding fee can financed into the loan, be paid in cash, or paid by the seller (if so negotiated in a purchase contract). The most outstanding feature of a VA loan is the ability to obtain 100% financing. Contrary to common beliefs, veterans are eligible to use VA loan over and over again in many cases. The loan is assumable to subsequent buyers. The maximum VA loan amount is $417,000.
FHA Loans are “insured” by the Federal Housing Administration. Borrowers typically provide a small down payment, but with special associated programs, the down payment can be obtained as a gift from a home advocacy non-profit association. A “Mortgage Insurance Premium” is paid to the FHA at closing, and the fee may be included in the loan. Additionally, a monthly insurance premium is added to the payment. The maximum loan amount for an FHA varies by location.
Rural Development “RD” Loans are guaranteed by the United States Department of Agriculture (USDA) and are intended to support housing in qualifying rural areas for home buyers with low or moderate income. The most outstanding feature of a RD loan is the ability to obtain 100% financing. There is no maximum loan, but the program does have income limits that vary by family size and location.
Conventional Loans are very common and are sold on the secondary mortgage market to Fannie Mae and Freddie Mac. Loans amounts cannot exceed the “conforming” loan limits set by Fannie Mae and Freddie Mac. The down payment can be as little 3% (with specialized financing) to as much as desired. Mortgage insurance is required on conventional loans with down payments less than 20% but can be removed when a 20% equity position is obtained by qualifying homeowners.
Jumbo & Super Jumbo Loans are much like conventional loans however they allow for loan sizes above the Fannie Mae Loan Limits. Loans greater than $1,000,000 are considered “super jumbo” loans.
Construction & Remodel Loans come in 2 main varieties including “one time close” and “2 time close” loans. A 2-time close loan includes a loan that is specific for the construction of a home. At the end of construction, a new refinance loan must be obtained to pay off the construction loan. In contrast, the “one time close” or “construction to perm” loan involves 2 phases of financing in one loan. During the initial phase, the loan operates like a traditional construction loan with “draws” for construction costs. At the end of constru,ction the loan “modifies” to permanent long-term financing (typically a 15 or 30 year fixed rate loan, but options are available.)