Purchase Loans

The term fixed-rate mortgage refers to a home loan that has a fixed interest rate for the entire term of the loan. 

Key Takeaways:

• Once locked in, the interest rate does not fluctuate with market conditions.
• Borrowers who want predictability and/or who tend to hold property for the long term tend to prefer fixed-rate mortgages.
• Typically offered in 15 or 30-year terms

A hybrid adjustable-rate mortgage, or hybrid ARM (also known as a "fixed-period ARM"), blends characteristics of a fixed-rate mortgage with an adjustable-rate mortgage.

Key Takeaways:

• Hybrid adjustable-rate mortgages (ARMs) offer an introductory fixed rate for a set number of years, after which the interest rate adjusts annually.
• When hybrid ARMs become variable, they will adjust on a regular basis, typically each year.
• Homeowners generally enjoy lower mortgage payments during the introductory period but may lose out if interest rates are higher when the fixed period expires.
• The most popular type of hybrid ARM is the 5/1, which has a fixed initial 5-year term followed by annual adjustments with a variable rate

A jumbo loan, also known as a jumbo mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA).

Key Takeaways:

• Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. 
• Homeowners must undergo more rigorous credit requirements than those applying for a conventional loan.
• Approval requires a stellar credit score and a very low debt-to-income (DTI) ratio. 
• The average annual percentage rate (APR) for a jumbo mortgage is often par with conventional mortgages
• while down payments are roughly 10% to 15% of the total purchase price.

In 1934, the Federal Housing Administration (FHA) was established to improve housing standards and to provide an adequate home financing system with mortgage insurance. Now families that may have otherwise been excluded from the housing market could finally buy their dream home.

FHA does not make home loans, it insures a loan; should a homebuyer default, the lender is paid from the insurance fund.

• Buy a house with as little as 3.5% down.
• Ideal for the first-time homebuyers unable to make larger down payments.
• The right mortgage solution for those who may not qualify for a conventional loan.
• Down payment assistance programs can be added to an FHA Loan for additional down payment and/or closing cost savings.

FHA 203k loans are a type of mortgage financing that is specifically designed for homeowners who are looking to make improvements to their property. These loans, which are also known as rehabilitation loans or renovation loans, are provided by the Federal Housing Administration (FHA) and are insured by the government.

Key Takeaways:

• FHA 203k loans is that they offer a high loan-to-value ratio. This means that borrowers can finance a large portion of the cost of their home improvements with an FHA 203k loan, which can be especially helpful for those who are looking to make significant upgrades to their property.

FHA ARM loans come in two types: standard and hybrid. With a standard ARM loan, your interest rate adjusts at regular intervals based on changes in the market. A hybrid ARM is similar but adds an initial fixed-rate period before the later period when the ARM adjusts.

Key Takeaways:

• The FHA has a few adjustable-rate mortgage options that can suit the needs of many borrowers. 
• It offers a standard 1-year ARM 
• It offers four "hybrid" ARM products, which have an initial interest rate that is fixed for the first 3, 5, 7, or 10 years. After that initial period, the interest rate adjusts annually.

Cal FHA, also known as the California Housing Finance Agency, is a state agency that provides a range of housing finance programs and services to residents of California. The agency, which was established in 1975, is the largest provider of mortgage financing in California and is a key source of funding for first-time homebuyers, low-income households, and other underserved populations.

Key Takeaways:

• One of the programs offered by Cal FHA is the CalHFA first-time homebuyer program. 
• This program, which is funded by the state of California and the federal government, provides a range of financing options, including low-interest rate mortgages, down payment assistance, and other resources, to help first-time homebuyers achieve their homeownership goals.

The Department of Veterans Affairs (VA) is a federal agency that provides a range of benefits and services to military veterans, including health care, education, and home loan benefits. The VA's home loan benefit, which is known as the VA Home Loan Program, is designed to help military veterans and their families buy, build, or improve a home.

Key Takeaways:

• One of the key benefits of the VA Home Loan Program is that it offers military veterans and their families the opportunity to buy a home with no down payment. 
• This can be especially helpful for veterans who may not have a lot of savings or other assets, as it allows them to buy a home without having to come up with a large down payment.