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The three types of available loans are FHA, VA, and Conventional.
An FHA loan is a loan that is insured by the Federal Housing Administration. FHA loans require borrowers to
pay MIP (Mortgage Insurance Premiums) which are paid monthly to insure the loan.
A VA loan is a loan made available for veterans and guaranteed by the Veterans Administration. VA loans require
the borrower to pay a one time VA funding fee.
A "conforming" Conventional loan is a loan no greater than $300,700, which is neither insured by the
FHA nor guaranteed by the VA. Loans with less than a 20% down payment require private mortgage insurance to insure the added
risk. On a purchase with 20% or more down, it may be beneficial to choose a conventional loan, as no additional fee is required
to insure or guarantee the loan. In addition, both FHA and Conventional loans are offered with either fixed rate or adjustable
rate terms.
Choosing the right type of mortgage can be a very easy task. However, the choice may not always be very clear, especially if
you are considering an Adjustable Rate Mortgage (ARM). You may have to do some homework to evaluate your personal financial situation
and then determine the features of available loan programs to analyze how they correspond with your needs.
Jumbo or "non-conforming" conventional loans are loans with loan amounts over $300,700. We offer a number of loan programs,
which include fixed rates as well as adjustable rates. Maximum loan amounts vary depending on loan to value ratios.
Burnet Home Loans offers a variety of adjustable rate programs, which are available for loans between $300,700 and $750,000.
Criteria for these programs will vary depending on specifics, but the basic programs are as follows:
- 1/1 ARM -- Fixed rate for 1 year and adjusts each year thereafter
- 2/1 ARM -- Fixed rate for 2 years and adjusts each
year after the second year
- 3/1 ARM -- Fixed rate for 3 years and adjusts each year after the third year
- 5/1 ARM -- Fixed rate for 5 years and adjusts each
year after the fifth year
- 7/1 ARM -- Fixed rate for 7 years and adjusts each year after the seventh year
- 10/1 ARM -- Fixed rate for 10 years and adjusts each year after the tenth year
All of these ARMS are based on the 1 Year Treasury Index and all have an annual as well as a "lifetime" cap.
Contact your Burnet Home Loans Mortgage Loan Officer for additional information. Call 612.844.6300 or E-Mail us at homeloans@cbburnet.com.
Interest Only 5/1 ARM
Adjustable rate mortgage fixed for 5 years with an interest only payment and annually adjusting thereafter with the full principal
and interest payment. This is also based on the 1 Year Treasury Index.
1 Month & 3-Month ARMs
Adjustable rate mortgages fixed for either one month and adjusting monthly thereafter or fixed for 3 months and adjusting monthly
thereafter. These ARMs are based on the 11th District Cost of Funds Index (COFI ARM).
100% Finance Option
We also offer a program where 100% is allowable to be financed provided that a portion of that amount is pledged against securities.
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