Financing is one of the most important keys to getting into the right home with a payment that will be comfortable for the term of your loan. I have wonderful lenders that I have worked with on many transactions. Let me know if you need a referral for a trusted lender.

LOAN TYPES

Most home loans fall into one of these two basic categories: fixed-rate and adjustable-rate mortgages (ARMs).

Fixed Rate Mortgages have interest rates that stay the same for the life of the loan.

Fixed-rate mortgages offer:

Best for people who:

Adjustable Rate Mortgages (ARMs) have interest rates that adjust periodically based on market conditions.

ARMs can offer:

After the initial fixed-rate period, the remainder of the loan term is divided into adjustment periods of typically one year or six months, depending on the ARM product you choose. At the end of each adjustment period, the interest rate may change based on the loan's terms and the current interest rate.

Interest-Only Loans: This loan requires no principal payment for the initial fixed-rate period. Repayment of the loan principal begins after a set period of time depending on the loan program. Many programs allow for an interest only term of up to 10 years.  This kind of loan should be used with caution and major planning.  Many investors and flippers have used these loans to finance their purchases when they felt strongly that they could immediately sell and not have to pay the loan once the principal began.   

LOAN TERMS

The "term" of a loan is the length of time over which you agree to repay the loan. The most common mortgage loan term is 30 years, but 15 and 20 year mortgages are also common.

Determining whether a longer-term loan or a shorter-term loan is better depends on a number of factors, most notably monthly income and long-term financial goals. Comparing two fixed-rate loans with different terms:

The longer-term loan offers lower monthly payments. This may be a good option if on a tight budget or it's preferable to direct monthly cash flow toward other investments or expenses.

The shorter-term loan results in higher monthly payments but also faster repayment of the loan, thus saving money on interest paid.

GOVERNMENT LOANS

The Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA) offer government-insured loans. These loans have features that make them easier for first-time home buyers to obtain. These features include:

To obtain an FHA or VA loan, apply through an approved lender like Golf Savings Bank. At every one of our branches, work directly with local loan experts experienced with these loans.

FHA LOANS

The Federal Housing Administration (FHA) insures qualified loans to promote homeownership for those with:

FHA loan limits vary by county, with larger loan amounts allowed in areas with higher housing costs.

FHA loan features include:

WHAT IS SUBPRIME LENDING?

Subprime lending is typically defined by the status of borrowers. A subprime loan is, by definition, a loan made to someone who could not qualify for a more favorable rate. Subprime borrowers typically have low credit scores and histories of payment delinquencies, charge-offs, or bankruptcies. Because subprime borrowers are considered at higher risk to default, subprime loans typically have less favorable terms than their traditional counterparts. These terms may include higher interest rates, regular fees, or an up-front charge.

Proponents of the subprime lending in the United States have championed the role it plays in extending credit to consumers who would otherwise not have access to the credit market. But opponents have criticized the subprime lending industry for predatory practices such as targeting borrowers who did not have the resources to meet the terms of their loans over the long term.

What's the difference between a home equity loan and a home equity line of credit?
	Home Equity Loan	Home Equity Lines of Credit
Description	Home equity loans provide you the funds you need in one simple, lump-sum disbursement.	Home Equity lines of credit are a resource you can use any time, for any kind of expense.
Ideal for	Major one-time expenses such as:   -Buying a new car   -Financing the down payment on a house   -Consolidating bills	Ongoing expenses including:   -Home improvements   -Educational and medical expenses   -Life events such as a wedding or a new baby   -Small business expenses
Payment Options	Predictable monthly payments that stay the same no matter how the economy may change	Monthly payments, including interest only that vary depending on the current rate and amount you've borrowed.
Interest Rate	Fixed interest rate.	Variable interest rate tied to the prime rate.
A smart option to consider if you:	-Are financially conservative -Want the stability of a predictable monthly payment -Prefer a simple product for a one-time need	-Have multiple needs now and in the future   -Prefer flexible payment options, including interest-only   -Are less concerned about changing rates and monthly payments