What types of mortgage programs are available? There are tons of mortgage programs that are available for consumers. The most common home loan program available is the 30 year fixed rate mortgage. This is simply a 30 year home loan that has a fixed interest rate for the life of the loan. Your principal and interest payment will never change on this loan. If you have included your taxes and insurance into your payment also that would be the only way your payment can change. Your property taxes or homeowners insurance would have to increase or decrease for you to see a change.

Another popular loan, a hybrid of sorts to the standard thirty year fixed, is the thirty year fixed - with an Interest Only payment option. For the first ten years of this loan, the borrower has the option to make an interest only option, which offers a lower monthly payment. The interest rate on this loan does not change for the entire thirty years term.

Many lenders are now offering 40 year mortgages (some even include an interest only option). If your payment is too high, ask your preferred mortgage professional if extending the length of the mortgage is your best solution.

Stated income loans allow you to simply state the income on your 1003 loan application without supplying documentation as with other loan types. This type of loan program normally holds a higher interest rate than with programs that require income documentation.

No Doc loans do not require you to show employment, income, or assets on your loan application. This loan type is a good match if you recently switched from W2 employment to a self employed individual.

The Pay Option ARM is a loan that allows you to choose from four different payment options each month. You can make a minimum payment, interest only payment, 30-year amortized payment, or 15-year amortized payment. These options allow you to decide how much you want to pay each month. This loan may be a good choice for self-employed people whose income changes from one month to the next, or real estate investors who want to keep their payments low to maximize cash flow.

A Federal Housing Administration(FHA) mortgage can be an excellent tool for you to purchase your first home. FHA requires a 3% down payment, that can be gifted to you. One of the benefits of FHA is the attractive rates, even if you do not have the best of credit. FHA guidelines can be more strict, than with most other mortgage programs. There is also a mortgage insurance premium (MIP) that will be required with all FHA loans, but the premium can be financed into the loan. Your mortgage broker, can help you decide if an FHA loan is right for you!

 

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