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Types
of Loans
With tighter
restrictions and lending guidelines, many of these loan programs
are no longer available, or more difficult to obtain. Talk
with a lender to find the right loan for you.
ADJUSTABLE
RATE Adjustable rate mortgages have an interest rate that
is adjusted at certain intervals based on a specific index
during the life of the loan.
BALLOON
PAYMENT LOAN A fixed rate loan this is amortized over 30 years
but becomes due and payable at the end of a certain term.
May be extended or may roll-over into another type of loan.
BUY-DOWN
LOAN Buy-Down loans are fixed rate loans where the interest
rate and the payment are reduced for a specific period of
time by paying the interest up front to subsidize the lower
payment. A fixed rate loan for first time buyers with a low
down payment, usually.
FHA LOAN
FHA loans are insured by the Federal Housing Administration
under H.U.D. They offer a low down payment and are easier
to qualify for than are Conventional loans.
FIXED
RATE LOAN Fixed rate loans have one interest rate that remains
constant throughout
the life of the loan.
GRADUATED
PAYMENT MORTGAGE A fixed rate loan that has payments starting
lower than a standard fixed rate loan, which then increases
by a pre-determined amount each year
for a set number of years.
MORTGAGE
CREDIT CERTIFICATE A first time homebuyer program subject
to purchase price and income limits. They are limited to Alameda,
Contra Costa, San Mateo and Santa Clara counties. It is actually
a special tax credit and assists the buyer in qualifying for
many loan programs.
NON-QUALIFYING
LOAN Non-qualifying loans are pre-existing loans which can
be assumed by a
buyer from the seller of a property without going through
the qualifying process. The buyer pays the seller for their
equity and then starts making the payments.
VA LOAN
VA loans are guaranteed by the Veterans Administration. A
veteran must
have served 180 days active service.
CONVENTIONAL
LOAN Conventional loans are sometimes more lenient with the
appraisal and
condition of the property. When you are buying a “fixer
upper” you may need to use a conventional loan. Homes
purchased above the FHA loan limit of $729,000 are usually
financed with conventional loans.
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