10 Popular Loan Programs

1. Conventional Loans (with and without PMI): PMI stands for Private Mortgage Insurance. Lenders require PMI when the Downpayment is less than 20%. You can still get a conventional mortgage with 5%, 10%, or 15% downpayment, but then PMI will be required. Lenders offset risk through the use of PMI. PMI can be seen as a good thing, because in the “old days” of lending if you did not have your 20% downpayment then you did not get the loan. PMI opens the door to home ownership to more people because of the lower downpayment requirement.

2. FHA/VA (Government Loans): The Federal Housing Administration (FHA) and Veterans Administration (VA) are government sponsored loan programs. VA loans are only available to men and women who have been or are in the Military. FHA loans, however, are available to everyone. There are many advantages of a FHA loan: 1) Only 3% Downpayment (which can be a gift from a Relative). 2) The Seller can pay up to 6% of your Closing Costs and/or Pre-Paid Items. and 3) Market Interest Rates. The current FHA loan maximum is $172,632.

3. 100% Financing: There are 2 basic ways to obtain 100% financing: 1) One loan with $0 down or 2) Two Loans (80/20 Combo). An 80% 1st Mortgage and a 20% 2nd Mortgage. There are household income limitations, approximately $40,000 per year, for the One Loan with $0 Down (this loan will also have Private Mortgage Insurance (PMI)). If you exceed this household income then the 80/20 Combo is the loan for you. You still have the advantage of 100% financing plus you have the added benefit of eliminating PMI (because the 1st loan is at 80% Loan to Value or less). In most cases, your total payment under the 80/20 Combo will be lower than the 100% One Loan because of the elimination of PMI. This type of financing is gaining widespread popularity.

4. 10% Down Investment Properties: Eligible are Single Family Homes and up to 4-Unit Multi-Family Homes (5 Units or more are considered Commercial Loans. We do those too!) The minimal Downpayment of 10% allows you to keep more of your money and purchase more investment properties.

5. New Construction Loans: 2 Ways to do New Construction Loans: One Close or Two Close. The type of home you are building plays a role: Stick-Built, Modular, or Manufactured Home. One Close (Stick-Built and Modular Only) is a Construction Loan than automatically converts to a Permanent Loan. Two Close (Stick-Built, Modular, and Manufactured Homes) is a Construction Loan that is then paid off by a Permanent Loan. Please call one of our Loan Officers at 574-ALL-TIMES (574-255-8463) to discuss in more detail New Construction Loans.

6. 15% Down Lot Loans: Conventional Mortgage, generally 15-20 year terms. Longer terms are considered on a case-by-case basis. This allows you to buy the lot now, then develop your plans and build later. Your Lot Loan will be paid off when you build with your New Construction Loan.

7. Stated Income Loans: Good programs for Self-Employed borrowers or others with fluctuating incomes. Your Income is not verified. Slightly higher rates, but still real competitive.

8. Jumbo Loans (over $359,650): Loans over this amount are considered Jumbo Loans. Interest Rates are slightly higher than regular Conventional Loans. Someone flirting with this level may wish to consider an 80/20 Combo or 80/10 Combo to avoid surpassing the Jumbo Loan limit (assuming the 80% 1st Mortgage stays under the Jumbo Loan limit).

9. Bad or Blemished Credit (B/C credit loans): This is the area of financing that has really expanded over the years. There are many avenues available for people with bad credit, even those recently out of bankruptcy. Although these loans have quite a bit higher interest rates than conventional financing, it is a very good way to re-establish your credit. Make timely payments on your B/C loan for 2 years then refinance into a Conventional Loan at market rates.

10. Commercial Loans: Most banks, which offer Commercial Loans, want a 20% Downpayment and will only amortize the loan over 15 years. We have programs with as little as 10% Down and can be amortized over 30 years. Please call one of our Loan Officers at 574-ALL-TIMES (574-255-8463) to discuss in more detail Commercial Loans.