Construction/Perm Loan
Building a new home?
But worried about the complicated financing of two separate loans?
| Construction/Perm Loan offers: |
- Simplicity
One application, one approval process and one set of closing costs.
- Convenience
You can buy the land, close your construction loan and secure permanent financing all in one day! And when the construction is complete you have an option to increase or decrease your loan amount, and even change to a different loan type.*
- Rate lock options
You can lock in the mortgage interest rate during the construction period for up to one year, with the opportunity to secure a lower rate if rates decline.
- Flexibility
Available in fixed-rate, adjustable rate, balloon, and jumbo mortgage options.
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| Best for people who are: |
- Building homes from scratch and need construction financing
- Builders who want to sell more homes by offering their homebuyers time and money savings
- First-time homebuyers or purchasers looking to buy new construction that would like to save time and money
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Bridge Loans
Purchasing a new home but haven't sold the old one?
Relocating and need time to sell your current home?
| Bridge loans offer: |
- Convenience: you don't have to wait until your current house is sold to obtain financing for your new home
- Less financial burden: you are only responsible for monthly payments on the new property during Bridge loan term
- More home: the mortgage payments on the listed property are not used to qualify you for your new loan
- More time: take up to six months to sell your existing property. Interest is due at the end of the term.
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| Best for: |
- Borrowers with high debt ratios due to two different mortgage payments
- People relocating who haven't had time to sell their current home
- Move-up buyers who don't qualify for financing two mortgage payments
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The Bridge Loan is the perfect answer for those borrowers who want to close on a new home but haven't sold or closed on their current home. Utilizing the equity in your old home to finance the purchase of your new home, can definitely ease your monetary burden. Don't delay, you can buy that new home sooner than you thought!
Adjustable-Rate Mortgages
Need extra borrowing power?
Plan to move or refinance in a few years?
| Adjustable-Rate Mortgages: |
- Assist borrowers in obtaining a larger loan amount
This is possible because qualifications are at the lower interest rate.
- Save money in the early years
Lower initial interest rate than a traditional fixed-rate loan
- Have a variety of adjustment periods
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| Best for people who: |
- Need extra borrowing power
- Want to save money in the first few years
- Plan to move or refinance in a few years
- Are purchasing or refinancing at a time when interest rates are comparatively high
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Adjustable-Rate Mortgages (also called ARMs) feature an interest rate that periodically adjusts with changing market rates. ARMs are available in government, conforming and jumbo loan amounts. The ARM allows you to take advantage of lower interest rates in a falling rate environment, and you'll benefit from lower monthly payments. The initial interest rate on an ARM is usually lower than the lifetime interest rate on a fixed-rate mortgage (FRM). ARM interest rates and the degree to which they fluctuate at the end of every adjustment period, are determined by:
Index: Published economic indices such as U.S. Treasury Securities or London Inter-Bank Offered Rate (LIBOR) that are used to direct the adjustment.
Margin: A fixed percentage (usually two to three percent) that is added to the index at each adjustment period
Rate Cap: Typically the maximum amount your rate can increase or decrease per adjustment period (2%) and over the life of the loan (6%). This protects you in case of volatile market swings.
Balloon Mortgage
Plan on being in your home for less than 7 years?
Need more purchasing power?
| Balloon Mortgages offer: |
- Larger loan amount
Because the initial interest rate is typically lower than with traditional fixed-rate mortgages, a homebuyer has more purchasing power.
- Predictable monthly payments
Payments are protected from rate increases for seven years.
- Special refinancing option
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| Best for people who: |
- Plan to sell or refinance their homes before the loan expires
- Expect to come into money by the time the balloon is due
- Relocate periodically
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The Balloon Mortgage has a fixed rate for seven years, followed by a "balloon" payment requiring repayment of the entire loan balance. Monthly payments are low because the interest rate is generally lower than a fixed-rate mortgage (FRM) and payments are amortized over 30 years. People may choose this type of loan because they plan on either selling their homes, paying them off, or refinancing them before the balloon payment is due.
Fixed-Rate Mortgage
Do you prefer regular mortgage payments with no surprises?
Plan on staying in your home for a long time?
| Fixed-Rate Mortgages offer: |
- Predictable payments
There are fixed monthly payments for the life of the loan.
- Protection from rising interest rates
For the life of the loan-- no matter how high market interest rates go up-- your rate remains the same.
- Rate lock options
You can lock in the mortgage interest rate during the construction period for up to one year, with the opportunity to secure a lower rate if rates decline.
- Faster equity growth
In comparison to other mortgage options such as ARMs and Balloon Mortgages
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| Best for people who: |
- Prefer regular payments with no surprises
- Are on limited or fixed incomes
- Plan to stay in their homes a long time
- Are purchasing or refinancing at a time when interest rates are comparatively low
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Jumbo Mortgage
Do you need to borrow more than $333,700?
Interested in leveraging your assets more effectively?
| Jumbo Mortgages offer: |
- Larger loan amounts to purchase more expensive homes
- Loan amounts as high as $1 million and down payments as low as 5%
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| Jumbo Mortgages facilitate high-end purchases of: |
- Primary residences
- Second or vacation homes
- Investment properties
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| Best for people who: |
- Want to finance larger and/or more expensive properties and can handle larger monthly payments
- Investment-minded buyers who want to leverage their assets more effectively
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Currently a jumbo mortgage is a purchase or refinance loan that exceeds $333,700 for a single-family home.* It is also called a non-conforming loan because it does not conform to the loan limits set by Fannie Mae (The Federal National Mortgage Association or FNMA) or Freddie Mac (The Federal Home Loan Mortgage Corp. or FHMLC).
80/10/10, 80/15/5, 80/20
Want to avoid the added cost of Mortgage Insurance?
Interested in sidestepping higher jumbo interest rates?
| Combining a first mortgage plus a home equity loan offers: |
- Cost effective down payment strategy: bypass the added expense of mortgage insurance while making a down payment as low as 5%.
- Lower interest rate: purchase a larger home with a smaller first mortgage, avoiding the higher interest rate of a jumbo loan.
- Build equity faster: the home equity loan has a shorter term allowing you to pay it off quicker.
- Simplicity: one application, one closing, one set of closing costs equals a two-in-one process saving time and reducing fees.
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| Best for: |
- First-time homebuyers trying to save for a large down payment.
- Move-up buyers with high-yielding investments who would rather use a home equity loan as a down payment instead of liquidating their assets.
- People delaying the purchase of a home because they are expecting to use a bonus, commission check or inheritance funds toward the down payment.
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| First Mortgage |
Home Equity Loan |
Down payment |
| 80% |
10% |
10% |
| 80% |
15% |
5% |
| 75% |
20% |
5% |
These combinations are the most popular; however, the first mortgage and home equity product can be used with various combinations in conjunction with a wide array of ARM, Fixed-Rate and Balloon loans.
Lender Paid Mortgage Insurance (LPMI)
Interested in avoiding mortgage insurance, even if your down payment is less than 20%?
Curious about how you can reduce your monthly payments?
| Lender Paid Mortgage Insurance offers: |
- Lower monthly payment
It's cheaper each month than traditional mortgage insurance
- Larger tax deduction*
Gives borrowers a bigger tax-deduction* because of the slightly higher interest rate (more savings)
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| Best for people who: |
- Have a down payment or equity of less than 15%
- Have a 20-, 25- or 30-year term mortgage
- Will most likely move or refinance in 10 years or less
- Want to reduce their monthly payments
- Want the largest tax deduction possible*
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Mortgage insurance is necessary if you put down less than 20% on a home. With Lender Paid Mortgage Insurance (LPMI), the cost of the mortgage insurance is included in the interest rate. Although the interest rate is slightly higher with LPMI, this option usually results in a lower monthly payment and a larger tax deduction.* This adds up to considerable savings when compared to other mortgage insurance options.
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