Home Loan Programs
There are a variety of home loan programs to consider and you will want to consult with your lender to determine the best one for you.
Fixed Loan Rate
A loan program which has am interest rate that remains constant throughout the life of the loan.
A fixed rate loan where the interest rate and payment are reduced for a specific period of time by paying the interest in advance (the buyer or seller can pay for the buydown).
A fixed rate loan that is amortized over a specific period, but becomes due and payable at the end of a shorter term (i.e. 5,6,7, or 10 years on a 30 year loan). Some of these loans have an option to be extended with a new rate or rolled into another type of loan. Usually, the rates on these loans are lower than a regular 30 year fixed rate loan.
Graduated Payment Mortgage (GPM)
A fixed rate loan which has payments starting lower than the payments on a standard fixed rate loan, then increasing by a predetermined amount each year for a specific number of years (usually five).
Adjustable Rate Mortgage (ARM)
A loan which has an interest rate that can change, either upward or downward, at specific periods during the life of the loan. The change in the interest rate is usually tied to a financial index over which the lender has no control.
FHA Loans are available as a fixed rate, ARM, GPM, or buydown. They are loans that are insured by the Federal Housing Administration and offer low down payments and lower income requirements.
Fixed loans are available with no down-payment to eligible Veterans, in-service Veterans and certain other reservists and National Guard members. VA loans are guaranteed by the Veteran’s Administration. A VA GPM loan is also available with minimal down-payment. (ARM loans are not presently available)
Community Homebuyers Program
A fixed rate loan with a low (3% to 5%) down-payment, no cash reserve requirement and lower income requirements. Subject to borrowers meeting maximum income limits and completion of a course of ownership.
Mortgage Credit Certificate (MCC) Program
A first-time homebuyer program subject to purchase price, income limits, and availability of funds. The MCC is actually a special tax credit and can be used with almost any loan program. The amount of the tax credit is used as additional income to qualify the borrower(s).
***Note: There are several programs that may be named different things and have different requirements, but most will fit in one of these loan types.