Loan Products

Fixed Rate Mortgage

Adjustable Rate Mortgage (ARM)

Jumbo Mortgages

FHA

Construction

Unsecured line of Credit

Fixed Rate Mortgage

With a fixed rate mortgage, you know exactly what your principal and interest payment will be each month for the life of your loan. It won’t change because your interest rate doesn’t change. Your taxes and insurance component of your payment towards escrow can change (and probably will) if your taxes and insurance change. Unfortunately, there’s no way to lock those in.  If interest rates go up, you’re protected with a fixed rate mortgage.  But, you won’t benefit if rates go down. You can always take advantage of falling rates by refinancing.

Fixed rate mortgages might be right for you if:

• Want the security of a fixed principal and interest payment.
• Think that interest rates will go up.
• Are on a fixed or limited budget.

Adjustable Rate Mortgage (ARM)

Compared to fixed rate mortgages, Adjustable Rate Mortgages (ARMs) offer a lower interest rate to start, so your monthly payments are generally lower. But, the interest rate moves up and down with the market based on an "index". Some of the more common indices include U. S. Treasury Bills, Cost of Funds Index (COFI) and the London Interbank Offered Rate (LIBOR).  Most ARMs have an initial fixed rate period where the interest rate doesn’t change followed by the rest of the loan’s lifetime period where the rate is adjusted at predetermined intervals. Many ARMs have caps that limit how much your interest rate can change per period as well as for the life of the loan.

Also be aware that there are some very low rates ARMs that start out with "discounted" rates. These discounted rates are below the market rate and will definitely go up at the first adjustment period.

Adjustable rate mortgages might be right for you if:

· You want more property than you can qualify for now with a fixed rate.

· You are confident your income will increase or rates will not go up much.

· You plan on selling or refinancing within seven years of buying your home.

Jumbo Mortgages

Jumbo Mortgages or nonconforming loans exceed the loan limits set by the two publicly chartered corporations (Fannie Mae and Freddie Mac) that buy mortgage loans from lenders. The 2005 single family loan limit is $359,650. If you need to borrow more than that amount, you need a jumbo mortgage. These jumbo mortgages typically have a higher interest rate than conforming mortgages.

FHA

The Federal Housing Administration (FHA) provides a loan guarantee program instead of the standard private mortgage insurance (PMI) so qualified borrowers can get a mortgage loan with a down payment as low as 3%. The FHA doesn’t make the loan but rather they guarantee the loan minimizing the lender’s financial risk. FHA loans usually offer fairly liberal qualifying criteria compared to Fannie Mae and Freddie Mac and involve small down payments. The offer both fixed and adjustable loans.

Construction

Construction loans are used to finance the building of a new home rather than purchase an existing home. They are usually variable-rate loans that have interest only payments during the construction phase. Draws are scheduled based on the stages of construction to pay the builders.

Many construction loans are construction-to-permanent which means that when construction is complete, the loan is converted to a normal mortgage. This has the advantage of a single loan with one closing.

Unsecured Line of Credit

Unsecured loans are loans offered by the bank that doesn't require the
borrower to pledge any collateral. Unsecured loans are credit-driven
loans that can be used as an all-purpose source of funds. Unsecured
lines of credit are often used for Working Capital, and Business
Expansion. Unsecured loans and lines of credit are also often used by
Homeowners and for down payments on their new home, new
appliances/furnishings, medical expenses, education, and for travel.

The Qualifying Criteria

Minimum Credit Score of 660 (700+ preferred)

Personal MAX = $60,000

Business MAX = $1M
Income Guidelines: Approx. 40% (Gross Annual Revenue)
To Qualify for $1,000,000-Line of Credit
Annual Income needs to be $1.68M-minimum
Credit Scores must be 720+

DTI’s over 35% may limit the amount the client qualifies for, and may
even be the cause of a denial.

The terms are usually between 60 - 72 months.

Interest Rates:
Personal Loan/Line of Credit
Interest rate is determined by individual's credit score and history

Business Lines of Credit
(Interest Rate = PRIME to 11.24%)

This is a very risky loan for the banks, and therefore any bumps in the
client’s credit history can and will cause the interest to rise to the level of
credit card rates. The loan or line is not tied to property (no collateral)!

The line is given according to the credit score, credit history, DTI, annual
income and truthfulness on the application.


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