Real Estate Loan Services
List of Conventional, VA and Construction Loan Services my Partners Offer.
There are many kinds of loan services offered by my team of experts. Here is a list of products you may want to inquire further about, in which case please contact me to discuss your requirements further so I can help you set priorities in your “buy sell or refinance” real estate transaction and get you in touch with the right partner(s).
FHA 203(k) loan
This type of loan allows a buyer to finance home improvement (construction) into an FHA loan. The FHA 203(k) loan program allows rehabilitation or improvement costs to be financed into the purchase or refinance home loan with the ease of one loan and one closing.
Conventional 15 Year Fixed
Conventional 15 Year Fixed Rate Mortgages offer a fixed initial interest rate that remains the same over the entire life of the loan. The monthly payments are amortized over a 15 year period. Many borrowers utilize a 15 Year Fixed Rate Mortgage to dramatically reduce the total interest expense they will pay over the life of their loan verses a 30 Year Fixed Rate Mortgage.
Conventional 20 Year Fixed
Conventional 20 Year Fixed Rate Mortgages offer a fixed initial interest rate that remains the same over the entire life of the loan. The monthly payments are amortized over a 20 year period.
Conventional 30 Year Fixed
Conventional 30 Year Fixed Rate Mortgages offer a fixed initial interest rate that remains the same over the entire life of the loan. The monthly payments are amortized over a 30 year period. The 30 year fixed rate mortgage is the most popular loan program as it allows borrowers to fix their interest rate for 30 years and provides the lowest monthly payment compared due to the longer amortization period.
Federal Housing Administration & Veterans Association Loans are government guaranteed loans that provide flexible underwriting requirements. These mortgage loans often require less income to qualify than traditional loans and may require little or no down payment. You must be an eligible Veteran to qualify for a VA loan. On an FHA loan, your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. My financing partners to not act on behalf of OR at the direction of HUD/FHA or the VA. Instead my partners are VA/FHA approved lending institutions.
Conventional 3/1 Adjustable Rate Mortgages [ARMs]
The Conventional 3/1 ARM offers a discounted fixed rate for the first 3 years of the loan with a 30 year amortization. After the 3rd year, the interest rate may adjust up or down a maximum of 2% annually, with a cap of 6% over the life of the loan. Conventional 3/1 ARM’s are also available with annual and lifetime caps of 2% and 4%, respectively but certain restrictions apply. Some Adjustable Rate Mortgages do not have a pre-payment penalty.
Conventional 5/1 Adjustable Rate Mortgages [ARMs]
The Conventional 5/1 ARM offers a discounted fixed rate for the first 5 years of the loan with a 30 year amortization. This can be very appealing to a buyer because it reduces the initial monthly payment for a five year period. After the 5th year, the interest rate may adjust up or down a maximum of 2% annually, with a cap of 6% over the life of the loan. Some of my partners offer 5/1 ARM with annual and lifetime caps of 2% and 4%, and without a pre-payment penalty but certain restrictions apply.
Conventional 7/1 Adjustable Rate Mortgages [ARMs]
Perhaps the most appealing loan for the lowest monthly payment allowed, the Conventional 7/1 ARM offers a discounted fixed rate for the first 3 years of the loan with a 30 year amortization. After the 7th year, the interest rate may adjust up or down a maximum of 2% annually, with a cap of 6% over the life of the loan. Some of my partners offer 7/1 ARM with annual and lifetime caps of 2% and 4%, and without a pre-payment penalty but certain restrictions apply.
Jumbo Loans up to $900,000
A “jumbo mortgage” is a mortgage up to $900,000 and has restrictions that make it best done through an expert in this type of loan like some of my partners.
Whether it’s a manufactured home or a dream home needing a loan of $3,000,000 to buy and remodel a new property or remodel and existing property, a construction loan can be a good solution for baby boomers, or first time buyer or downsizing veterans. Some of the benefits are:
- Construction and permanent financing with a single closing
- Available for new construction or major remodel of an existing property
- Primary residence and second home financing available
- Borrow up to $3,000,000
- Finance up to 90% LTV
- Up to 18 month construction period
- Financing is also available on new manufactured homes
The United States Department of Agriculture loan program allows financing of 100% of purchase price with a 3.5% Guarantee Fee financed into the loan. There is no monthly mortgage insurance and the borrower doesn’t have to be a first-time home buyer, but cannot own “adequate housing in the local commuting area.” The property needs to be a maximum of 5 acres and seller paid closing costs are acceptable.
With a reverse mortgage a veteran or baby boomer can use their home as security for a loan. This is just like a traditional mortgage. With a traditional mortgage the borrower makes monthly payments until the loan is paid in full. With a Reverse Mortgage you never make payments. The idea behind a Reverse mortgage is to convert the equity in your home to cash without having to sell the house. This provides money for improving the finances of many seniors. These may or may not be appropriate for your situation, please contact me for further information.
Bridge Loans for Upsizing or Downsizing
Bridge Loan Financing is for buyers looking to purchase a new home without having sold their current primary residence. There are various ways to originate bridge loans. My partners can customize a loan to obtain the equity from a buyer’s current home [if for example they are downsizing to a smaller home with a VA loan and selling their current home, a bridge loan can apply the equity from the home being sole as a down payment for the purchase of a new home. Certain restrictions apply.
Sale with Gift of Equity Loans
Fannie Mae Rules allow a qualified donor to gift the equity in a property to a qualified buyer. This is typically done between parents and children but can apply to other relationships of buyer and seller. This type of loan is less frequently encountered because many estate plans involve a property being held in revocable living trusts, revocable trusts, with life estate provisions that can cause underwriters to shy away from a transaction. Although trusts and life estates can provide a smooth transition of assets from one generation to another without subjecting the donor to gift taxes or the donee to increased property tax reassessments, because their tax basis steps up in a trust to date of death of the donor]. Since in California, life estates have value [under Medi-Cal l rules] if a donor’s name is on title the time of application for skilled nursing home care or long term care or even at time of death, Medi-Cal can place liens on equity in a home or recover costs upon death of the donor. For this reason lenders will not loan to trusts but only to people. So buying or refinancing becomes impossible for titles with trusts or life estates on the property. However, a Sale with Gift of Equity is allowed by Fannie Mae lending rules and is much cleaner from a Medi-Cal [look back or life estate] point of view. This is because it has the key advantage of “getting the asset out of the donor’s name” so there is nothing to trigger medical lookback or recovery auditing. So as part of your estate planning discussion with your attorney, you should carefully understand these issues if you plan to refinance a gifted property and you should also calculate your long term gift and capital gain tax exposures if any. It’s generally best to do a life estate and trust later after the “Sale with Gift of Equity”. As an important note, in a “Sale with Gift of Equity” loan. It’s very important to apply for the Parent Child Exemption from Re-assessment before escrow so the loan package in terms of projected property tax payments is accurate and unquestioned by the underwriters. For the latest opinion from the California State Board of Equalization and the requirements for this important alternative to estate planning click here.