Margaryta Booth Principal Broker

King Neptune Statue on the Boardwalk in Virginia Beach

Loan Programs

Loan Programs Available for the Buyers

If you thought there was just one way to get a mortgage you need to read just a short version of programs out there.  It is very important for you to really understand the program you are signing up for before you sign on the dotted line. There are many-many loan programs offered for Home Buyers. In many cases it depends on many factors what kind of loan program you qualify for. For example, the First Home Buyers are offered to purchase home with low or even zero down payment. Your credit score will also determine the program you may qualify for. That is why, we highly recommend you to talk to multiple Loan Officers because some companies may offer you more options.

Below is a brief explanation of some of the most commonly used loan programs:

Fixed Rate Loan: A loan that has an interest rate remaining constant throughout the life of the loan.

Buy-down: A fixed interest rate and payment are reduced for the specific period of time by paying interest rate in advance.

Balloon Loan: A fixed rate loan that is amortized over a 30-year period, but becomes due and payable at the end of the shorter term (7 or 10 years). Some of these loans have an option to be extended a year rate or rolled into another type of loan.

Adjustable Rate Mortgage (ARM): A loan that has an interest rate that can change, either upward or downward, at specified periods during the time of the loan. The change in the interest rate is usually tried to financial index over which the lender has no control.

FHA Loans: The type of loans that are available as fixed rate or ARM and are insured by the Federal Housing Administration and offer low down payments and lower income requirements. There is a maximum FHA loan limit that varies from region to region. The Mortgage Institutions I work with are FHA Direct Endorsement Lenders, which greatly speeds up the loan process.

VA Loans: Fixed and ARM loans are available with no down payment to eligible Veterans, In-Service Veterans, certain Reservists, and National Guard members. VA loans are guaranteed by the Veteran’s Administration. The maximum loan is determined by the Veteran’s available eligibility. Again, the Mortgage Institutions I work with are VA Automatic Lenders, which also means they can make most underwriting decisions for the VA, speeding up the loan process. They are in the Top 5 VA lenders in the Nation!

Community Home Buyers Program: A fixed rate loan with a low (3% to 5%) down payment, no cash reserve requirement and lower income requirements. Subject to borrowers meeting maximum income limits and completion of a 4-hour training course on homeownership.

Mortgage Credit Certificate (MCC) Program: A first-time home buyers’ program subject to purchase price, income limits and availability of funds. The MCC is actually a special tax credit and can be used with almost any loan program.