Mortgage Information

There are many mortgage options available to make buying a home suit your needs. Mortgage rates change daily. Consult your mortgage lender or financial institution for the most updated rate information.

Mortgage Loans Available:
Adjustable Rate Loans (ARM) a mortgage loan that allows the interest rate to be changed at specific intervals over the maturity of the loan.

• All ARMs are amortized over 30 years
• The monthly payments vary up or down over the life of the loan-usually 25-30 years. Interest rate may be adjusted at predetermined times
• The interest rate is linked to a financial index, such as a Treasury Security or a Cost of Funds
• Some ARMs may offer a rate cap on the interest rate to protect the borrower. Rate cap stipulations may limit the amount the rate can be increased, both each year and over the life of the loan.
• ARMs are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments
• Best choice for homeowners who plan to relocate
• Not the best choice if you are on a fixed income

Graduated Payment Mortgage (GPM) is another alternative to the conventional adjustable rate mortgage

• GPMs have a fixed note rate and payment schedule
• Payments are usually fixed for one year at a time
• Each year, for five years the payments graduate at 7.5%-12.5% of the previous years payment
• Available in 30 year and 15 year amortization
• GPMs have scheduled negative amortization of approximately 10%-12% of the loan amount depending on the note rate. The higher the note rate the larger degree of negative amortization

Fixed rate mortgage means the interest rate stays the same the life of the loan. Taxes may change.

Types of Fixed-Rate Mortgages

• 15 Year Fixed - Rate Mortgage
• 20 Year Fixed Rate Mortgage
• 30 Year Fixed Rate Mortgage
• 40 Year Fixed Rate Mortgage
• A more stable loan for those on a fixed income.
• Market conditions wonÕt change the interest or principal.
• Ideal if your plans include staying in the home for several years

80-10-10- Mortgage is type of mortgage combined with three types of loans to avoid mortgage insurance.

• 80% of the value of the home is combined with a second mortgage that covers 10% of the value. The remaining 10% is a cash down payment.
• Balloon loans: Mortgage with lower interest rates. The final payment on a loan, when that payment is greater than the preceding installment payments and pays the loan in full.

The chart below only indicates your monthly principal and interest on your mortgage payments. You can use it to estimate a figure for the monthly payment you can expect to make on a home.

* Amounts do not include the escrow portion of your payment that lenders may require for real estate tax, mortgage insurance.

Interest Rates

Begin by checking out current interest rates and rate movements when shopping for a mortgage.

Annual Percentage Rate (APR)- a tool used to compare loans across different lenders. The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. It is designed to represent the true cost of the loan to the borrower, expressed in the form of a yearly rate. The purpose is to prevent lenders from hiding fees and upfront costs behind low advertised interest rates.

Lock In Your Rate- also called a rate lock or rate commitment, is a lenderÕs promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed.

• Depending upon the lender, you may be able to lock in the interest rate and number of points that you will be charged when you file your application, during processing of the loan, when the loan is approved, or later.

Qualifying for a low down payment loan

To be considered for a low down payment loan, you generally need to have:

• Sufficient income to support the monthly mortgage payment
• Enough cash to cover the down payment
• Sufficient cash to cover normal closing costs and related expenses
• An excellent credit background that indicates your payment history of "willingness to pay"
• Sufficient appraisal value, which shows the house is at least equal to the purchase price
• In some instances, a cash reserve equivalent to two monthly mortgage payments

Tax Deferment Options
1031 Exchange
The tax deferred exchange, as defined in Section 1031 of the Internal Revenue Code of 1986, as amended, offers investors one of the last great opportunities to build wealth and save taxes. By completing an exchange, the investor (Exchanger) can dispose of their investment property, use all of the equity to acquire a replacement investment property, defer the capital gain tax that would ordinarily be paid, and leverage all of their equity into the replacement property.