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15-Year Fixed-Rate Mortgage

You pay off a 15-year fixed-rate mortgage in half the time you pay off the traditional 30-year fixed-rate mortgage. This shorter term makes it possible for you to build up equity in your home faster, which can let you move up more quickly to a more expensive home or save more in preparation for retirement or a child's education. This loan is particularly attractive if you're refinancing your mortgage because you shorten your loan term plus enjoy a lower interest rate - 15-year mortgages are usually offered at interest rates lower than those available with 30-year mortgages. However, higher monthly payments may make it more difficult to qualify for compared to the 30-year fixed-rate mortgage.

Advantages:
Offers a lower interest rate than a 30-year or 20-year mortgage.

Saves you a significant amount of interest over the life of the loan. For example, with a $100,000 loan at 8.25 percent interest, the 15-year mortgage will save you $95,000 in interest payments over the life of your loan, compared to the same mortgage amount for a 30-year term. However, your monthly mortgage payments will be higher.

This shorter-term mortgage allows you to own your home outright sooner.

Details:
Eligible properties include one- to four-family, owner-occupied principal residences; second homes and investment properties; and condos, co-ops, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

20-Year Fixed-Rate Mortgage

With a 20-year fixed-rate mortgage, you build up equity in your home more quickly and save quite a bit of interest over the life of your loan. As with all fixed-rate mortgages, the interest on your loan never changes, bringing you peace of mind that your principal and interest payments will remain level over time. However, higher monthly mortgage payments may make it more difficult to qualify for compared to the 30-year fixed-rate mortgage.

Advantages:
You pay less interest over the life of your loan, compared to a 30-year fixed rate mortgage. For example, on a $100,000 loan at 8.25 percent interest, the 20-year fixed rate mortgage can save you over $65,000 in interest payments when compared to a 30-year mortgage.

Interest rate payments in the early years of the mortgage are comparable to a 30-year mortgage, allowing for a sizable mortgage interest tax deduction.

Your monthly payments are significantly less than for a 15-year mortgage, allowing you a greater chance to qualify for this type of mortgage.

Details:
Eligible properties include one- to four-family, owner-occupied principal residences; second homes and investment properties; and condos, co-ops, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

30-Year Fixed-Rate Mortgage

The most popular type of mortgage, the 30-year fixed-rate loan, is most appealing to borrowers who want to stay in their homes for a long period of time and who want to enjoy consistent payments during this period. Other benefits include keeping housing expenses to a minimum while maximizing mortgage interest deductions for income tax purposes.

Advantages:
Can require a low down payment, sometimes only 3 or 5 percent

Consistent monthly payments

Stable payments, monthly payment will not increase

Provides maximum interest deduction for tax savings

Details:
Eligible properties include one- to four-family, owner-occupied principal residences; second homes and investment properties; and condos, co-ops, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

Adjustable-Rate Mortgage (ARM)

The adjustable-rate mortgage (ARM) became popular in the early '80s, when long-term interest rates were high and people needed a new type of financing to buy homes. These products start out with a lower interest rate, then the interest rate adjusts periodically. If you're confident that your income will increase steadily over the years, or if you plan to move in a few years and aren't concerned about potential rate increases, you may want to consider an adjustable-rate mortgage. With an ARM, your interest rate may move up or down as market conditions change. Interest rate changes typically are subject to two caps, one for each adjustment period and one for the life of your loan. When discussing ARMs with your lender, be sure to ask what the maximum interest rate adjustments can be for any ARM product you consider.


One-Year Adjustable-Rate Mortgage

This adjustable-rate mortgage (ARM) offers a low initial interest rate with an interest rate that adjusts annually after the first year. The rate cap per annual adjustment is usually 2 percent; the lifetime adjustment caps can be 5 percent or 6 percent. This type of mortgage may be right for you if you anticipate a rapid increase in income over the first few years of your mortgage. That's because it lets you maximize your purchasing power immediately. It may also be the right mortgage for you if you plan to live in your home for only a few years.

Advantages:
You can get a one-year ARM with a term from 10 to 30 years. The most typical ones are 10, 15, or 30 years.

The one-year ARM is most often indexed to the weekly average yield of U.S. Treasury securities adjusted to a constant maturity of one year.

Can be used to buy one-family, principal residences, including condos, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

You can get a one-year ARM with a term from 10 to 30 years. The most typical ones are 10, 15, or 30 years.

The one-year ARM is most often indexed to the weekly average yield of U.S. Treasury securities adjusted to a constant maturity of one year.

Can be used to buy one-family, principal residences, including condos, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)


Six-Month Adjustable-Rate Mortgage

This adjustable-rate mortgage (ARM) offers a low initial interest rate for the first six months with an interest rate that adjusts every six months thereafter. The rate caps per adjustment can be 1 percent or 2 percent; the lifetime adjustment caps can be 4 percent, 5 percent, or 6 percent. This type of mortgage may be right for you if you anticipate a rapid increase in income over the first few years of your mortgage. That's because it lets you maximize your purchasing power immediately. It may also be the right mortgage for you if you plan to live in your home for only a few years.

The interest rate is tied to a published financial index. When comparing ARMs that have different indexes, look at how the index has performed recently. Your lender can provide information on how to track a specific index and how to review a 15-year history of the index.

Advantages:
Maximizes your buying power immediately, especially if you expect your income to rise quickly in the next few years.

Lets you select an index that meets your financial needs.

Easier to qualify for due to a low interest rate and a 1 or 2 percent annual rate cap.

Some six-month ARMs let you convert to a fixed-rate loan at certain adjustment intervals - ask your lender which of their six-month ARMs include this option. Your lender can also provide further specifics about this mortgage option.

Details:
You can get a six-month ARM with a term of 10 to 30 years. Typically, they are 10, 15, or 30 years.

Can be used to buy one- to four-family, owner-occupied principal residences including second homes, investment properties, and condos, co-ops and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

Balloon Mortgage

The balloon mortgage is a type of fixed-rate mortgage. The principal and interest you pay are amortized over a longer period (30 years) than the actual term of the mortgage. At the end of the balloon period, you may pay off the outstanding balance with a lump-sum payment or exercise the option to refinance for the remaining term. The option to refinance is conditional, meaning you have to meet certain conditions (such as a history of timely payments or no second liens on your property).

Advantages:
Ideal if you plan to sell or refinance your home within seven years and want a low monthly payment during that time. The interest rate you pay on a balloon mortgage is usually lower than a comparable 30-year fixed-rate mortgage.

With a refinance option at the end of seven years, you have a "safety net" in case a planned relocation doesn't take place or economic conditions prevent you from moving to a larger home. (You may want to understand all the conditions needed for a refinance before getting this loan.)

You need not re-qualify for this loan when refinancing at the end of seven years as long as the new interest rate is not more than 5 percent above the current interest rate.

Details:
The refinance condition is not automatic - you must exercise the option.

Refinancing conditions may include payment of closing costs and a lender fee, as well as no 30-day late payments in the previous 12 months and no other liens on your property.

You must occupy your property at the time of refinancing.

This mortgage can be used to buy one-family, principal residences, including condos and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

Biweekly Mortgage

This fixed-rate mortgage is designed for borrowers who wish to accumulate equity in their homes quickly, but need a low down payment and low monthly payments. It is particularly well-suited to borrowers who are paid every two weeks by automatic deposit, because payments must be automatically drafted from the borrower's account every two weeks. If you want stable payments and seek to build equity in your home more quickly, this type of loan may be for you. It is available for most fixed-rate mortgages.

Advantages:
You save the amount of interest paid over the life of the loan, which will help you pay your mortgage more quickly than by making payments monthly.

Your mortgage payment is usually deducted automatically from a deposit account, saving you the cost of postage to mail your payment. Additionally, you may find it's easier to manage your finances by having your mortgage paid at the same time you receive your paycheck.

Details:
Interest is calculated amortizing the mortgage every 14 days, using a 365-day calendar year, resulting in 26 (27 in some cases) payments a year.

Biweekly mortgages can be used to buy one-family, principal residences, including condos and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

Fixed-Period Adjustable-Rate Mortgages

This type of adjustable-rate mortgage (ARM) maintains the same initial interest rate for the first three, five, seven, or 10 years of your loan, depending on the term you choose. Your interest rate then adjusts annually, and can move up or down as market conditions change. Be sure to ask your lender about the interest rate caps for both the annual adjustments and for the life of the loan.

Advantages:
Your initial interest rate will be lower than a fixed-rate mortgage, so you may be able to afford more home.

You are protected against interest rate increases for the first three, five, seven, or 10 years of the loan, depending on which type of fixed-period ARM you choose.

You may have the option to convert your ARM to a fixed-rate mortgage at the first, second, or third interest rate adjustment dates.

You have time to improve your financial position (i.e., salary increases) or accumulate additional assets before the interest rate adjusts at the end of the fixed period.

Details:
The lifetime interest rate cap for fixed-period ARMs is typically 5 to 6 percentage points above your initial rate. Your annual cap during the adjustable period is typically 1 to 2 percentage points above or below over the current rate.

Can be used to buy one- to four-family residences including second homes and condos, co-ops and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)

Fixed-Rate Mortgage

Fixed-rate mortgages, the most popular type of mortgage, offer the peace of mind that your interest rate will remain the same for as long as you have your loan. If you expect to live in your home for many years, having the same interest rate may be your key concern. If you decide that you like the stable, predictable payments of a fixed-rate loan, you have the option of choosing from a variety of repayment terms: 15, 20, and 30 years are the most common. Typically, the longer the term of the mortgage, the more interest you pay over the life of your loan. However, stretching out your repayment term means your monthly mortgage payments will be less than they would be with a comparable shorter-term mortgage.

Home Equity Conversion Mortgage (HECM)

A Home Equity Conversion Mortgage (HECM) is a type of home loan that lets homeowners aged 62 or over with little or no remaining balance on their mortgage convert their equity into cash. The equity can be paid to the homeowner in a lump sum, in a stream of payments, draws from a line of credit, or a combination of monthly payments and line of credit.

Whatever payment plan you select, you do not have to repay any part of this reverse mortgage until you sell the home, vacate it for another reason, or violate the loan's terms and conditions. At that time, you pay the loan balance, plus any accrued interest. Any proceeds above that amount go to you or to your estate.

Developed by the Federal Housing Administration (FHA), the HECM mortgage provides a cash growth feature not found with some other reverse mortgages - check with your lender to see how this works based on your personal needs and your payment plan.

Advantages:
The funds are yours to spend in any way you choose.

There are no monthly payments with a HECM.

Your loan funds do not affect Social Security or Medicare benefits. (If you receive Supplemental Social Security or Medicaid, these benefits may be affected.)

You do not have to pay back the loan until you sell your home or no longer use it for your primary residence. Then, you or your estate will repay the cash you received from the HECM, plus interest and other finance charges to the lender. This means that the remaining equity in your home can be passed on to your heirs through the sale of the property.

You will never owe more than the value of the home at the time of repayment, even if the loan balance exceeds the value of your property. This means no debt will ever be passed along to the estate or your heirs.

Details:
You and any co-borrowers must be at least 62 years old.

You must own your home outright - or carry a small mortgage balance.

Eligible properties include a single-family home, a two- to four-unit dwelling, a condominium or a manufactured home. All housing types must meet Federal Housing Administration (FHA) guidelines. (Ask your lender if your property qualifies.)

Your home must be your principal residence, which means you must live in it more than half the year.

You must attend pre-application reverse mortgage counseling before you apply for the loan.

You must keep applicable taxes current, as well as maintain insurance coverage on your home.

The amount you can borrow with a HECM depends on the age of the youngest borrower(s), the interest rate, how much your house is worth, and the maximum claim amount. In general, you can get between one-third and one-half of your equity as a line of credit or as a lump sum payment.

The balance of funds advanced against the equity in your home is due and payable when you relinquish your home as a primary residence, or if the borrower(s) pass away. You may have to pay off the debt if you fail to pay property taxes or insurance or if you do not maintain your property.

Home Improvement Mortgages

Would you like to fix up an older home? Have you found a house that's almost perfect but lacks the master bedroom and bath you want? Are you thinking about remodeling your kitchen, or repairing the roof, gutters, and siding? By choosing to buy and fix up a home or by renovating your current home, you can make your dream house a reality. And with the right financing, you can do it economically. If you've decided to purchase and improve an older home or plan to enlarge, upgrade, or repair your existing home, you'll have to decide how to finance the work.

Low Down Payment Mortgage

Recognizing that saving enough money for a down payment can be a major stumbling block to buying a home, lenders have developed a wide array of low down payment mortgages. These products are ideal if you have limited funds for closing costs as well. All these mortgages let you borrow up to the amount of the current loan limit toward the purchase of a one-family home that you intend to make your primary residence. The loans are generally designed for home buyers with very good credit histories; other low down payment loans offer more flexible qualifying requirements and may be particularly helpful if you have a limited income.

Reverse Mortgage

Unlike a traditional mortgage that you pay back each month, reverse mortgages provide payments to you. They, in effect, "reverse" the direction of the mortgage payments. With reverse mortgages, no repayment of the loan is required until you no longer occupy the home as your principal residence. At that time, the loan is due and payable. If you and any of your co-borrowers are at least 62 years old and own your home free and clear of a mortgage or have very little mortgage principal outstanding, reverse mortgages may be for you. They provide an excellent opportunity for older Americans to enjoy extra security and financial support. To provide additional housing options for older homeowners, HUD insures reverse mortgages under the Home Equity Conversion Mortgage (HECM) program.

Rural Housing Loan

Borrowers in rural areas have easier access to affordable housing, due to partnerships with the Rural Housing Service on its Section 502 Guaranteed Rural Housing Loan and its Rural Direct Leveraging Loan. The loans are backed by the Rural Housing Service, a division of the U.S. Department of Agriculture.

To learn more: Contact the nearest RHS office for information on qualified areas within your state and names of participating lenders. The RHS Web site may also provide additional information.

Advantages:
No down payment is required for low- and moderate-income buyers.

Affordable monthly mortgage payments.

Often times, below market interest rates are offered on the Rural Direct Leveraging Loan.

No cash reserves required in your savings account when you go to closing.

You need less cash up-front than you would for FHA loans.

Details:
The borrower's income is limited to 115 percent of the area median income for the guaranteed loan and 80 percent of the adjusted median income for the Direct Leveraging Loan.

Single-family, non-farm, owner-occupied principal residences, including new manufactured housing units, are eligible.

Eligibility is limited to rural areas, which generally have a population no more than 10,000. In areas far from major metropolitan cities, the town population limit (where the property is located) may be as high as 20,000.






PO BOX 1115, Nederland, TX 77627
Phone: 409-724-MOVE (6683)
Fax: 1.888.897.4381
E-mail: LibbyMitchellRealtor@gmail.com



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