Phone: 001-407-931-3800 ext. 106

Loan Programs and Loan Options:

In today's lending market there are many options to choose from. Sometimes the differences in these programs can be subtle but significant. This page provides an overview of many of the different programs on the market.

80/15/5 - This is a loan which carries a second mortgage for up to 15% of the purchase price of the property. It is usually used when wishing to avoid PMI insurance or to keep your first mortgage under the FNMA/FHLMC limit to avoid Jumbo rates. The borrower puts down a 5% down payment and then finances a first mortgage up to the FNMA/FHLMC limit and a second mortgage of up to 15% of the purchase price. Other variations are 80/10/10 or 75/15/10.


FHA MORTGAGE -Federal Housing Administration which is a part of the Department of Housing and Urban Development offers the borrower the ability to put as little a 3% down payment. They can even finance your closing costs. Seller can contribute up to 6% of the purchase price to the buyer towards closing costs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit. Section 203(b) is the most frequently used FHA program


203K FHA MORTGAGE - Same as FHA above but with the ability to finance home improvements that are needed. One mortgage is given based on the value plus improvements up to 115% of the future value. These improvements must be over $5000 and can be for a new kitchen, new bathroom, to add a garage or to structurally improve the property. They cannot be to add a swimming pool etc.


VA MORTGAGE - Backed by the Veterans Administration and the federal government it is similar to FHA except that you have to be a qualified Veteran or military person. Lenders generally limit the maximum VA loan to $203,000. The VA program allows veterans and service persons to obtain home loans with favorable loan terms, usually without a down payment.


JUMBO LOANS - Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as 'jumbo' loans. The 2008 conforming loan limit for first mortgage is;

This program offers 30 and 15 year fixed rate mortgage and competitive ARM products with full document, alternate documentation and limited documentation. Cash out and No cash out refinance are allowable.  Single family detached, Condo~Rs, PUD~Rs and single-family second homes can be financed with no prepayment penalty. 


EMERGING MARKETS PROGRAM - 0% Down payment required and closing costs can be financed up to 105% of the purchase price. Only single-family homes that will be owner occupied are eligible. First time home buyer status not required and there are no income limits.



NO DOC/STATED INCOME - Loans where your income is not requested or verified with as little as 10% down are stated income loans.  There are several varieties of the "no-doc" loan today. Basically the type of loan that is best suited for a particular borrower depends on that borrower's situation. Some borrowers choose not to disclose employment, income or asset information, while others may be willing to disclose employment and asset information but not income. Still others might be willing to disclose even income but select a program that doesn't calculate debt-to-income ratios allowing those borrowers to exceed the traditional guidelines in order to qualify for a larger mortgage amount. With all the different variations of the no-doc loan, there is definitely a mortgage program for today's non-conventional borrowers.


INTEREST ONLY - Shorter term adjustable rate mortgage where borrower is not required to make payment on the principal.


FLEX 97% - Similar to FHA but without maximum mortgage amount limitations. Must be a single family, owner occupied home and borrower must have a credit score of over 680.


A- THRU D LOANS - These mortgages are for individuals with imperfect credit. They can vary from slightly damaged credit to severely damaged. Whatever the situation we have a mortgage that will get you back on track.


2^ND MORTGAGE LOANS - Subordinate to the first mortgage these loans offer the borrower the ability to get money for home improvement, debt consolidation or many other reasons without disturbing their first mortgage. Convenient when you have a low interest first mortgage.


HIGH DEBT RATIO LOANS - Borrowers having the ratio of their monthly bills to their monthly income higher than 50% is considered a high debt ratio.  Loan programs are available for these borrowers, allowing them to finance the purchase of a home or property.


CONSTRUCTION LOANS - Building a new home can be an exciting prospect - unless you get caught up in a construction loan approval process that's overly complicated and time consuming. With this loan we will finance up to 90% of the cost of land plus the costs of construction. We offer a one time fixed rate closing or the traditional ARM products. Short term construction loans, STANDBY and CONSTRUCTION PERMANENT loans are available. Construction lenders normally make short term loans (6 months tp 1 year) and then require a permanent lender to fund the project and pay off the construction loan. Institutional banks are an excellent source for construction loans only. Savings and loans are an excellent source for construction and permanent financing. Stanby loans are writen for the purpose of the borrower being able to secure a construction loan. The standby lender simply agrees to stand by for a certain period of time and fund the loan at the end of that period. 


INVESTOR LOANS - Used to finance 1-4 family properties that will be for investment with as little as a 10% down payment. Aggressively priced these programs have many variations such as LIMITED DOC and FULL DOC. PROGRAM NOT AVAILABLE IN NEW YORK.

OPTION ARM - This loan program is an adjustable rate mortgage with added flexibility of making one of several possible payments on your mortgage every month, in order to better manage your monthly cash flow. Option ARM loan programs are right for you if you'd like to own your property only for a short time, and prefer affordability and flexibility in your monthly payment. With the minimum payment option, your monthly payment is set for 12 months at your initial interest rate. After that, the payment changes annually, and apayment cap limits how much it can increase or decrease each year. With the interest-only payment option, you can avoid deferred interest, when the minimum payment is not enough to pay the monthly interest due. The interest-only payment option, however, is not available if the interest-only payment would be less than the minimum payment. With fully amortizing payments (30 year payment), you pay both principal and interest and keep your loan on schedule. Your payment is calculated each month based on the prior month's fully indexed rate, loan balance and remaining loan term. If you prefer to put your loan on an accelerated schedule and can afford higher monthly payments, the 15-year payment option allows you to repay your loan twice as faster and save more than half the total interest costs of a 30-year loan.

Mortgage Terms & Definitions

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Acceleration Clause
A provision in a mortgage that gives the lender the right to demand payment of the entire outstanding balance if a monthly payment is missed.

Adjustable Rate Mortgage (ARM)
A mortgage with and interest rate that fluctuates according to the movements of a predetermined index. There are several types of ARM's, some change quicker than others, but all have a ceiling cap.

Alternative Financing
Mortgage options available below market rate including ARM's, buy down's and graduated payment mortgages (GPM's).

Amortization
The gradual repayment of a mortgage by installments.

Amortization Schedule
A timetable for payment of a mortgage showing the amount of each payment applied to interest and principal and the remaining balance of the loan.

Annual Percentage Rate (APR)
The total cost of your mortgage loan expressed as an annual interest rate. This includes the base interest rate, mortgage insurance, origination fees, and some other related fees.

Appraisal
An opinion by a licensed real estate appraiser regarding the fair market value of a property.

Appreciation
Difference between the increased value of a property and the original cost of the property.

Assumable Loan
Usually for a small assumption fee, a new buyer can take over or assume the loan of the previous homeowner, saving closing cost and loan origination fees. Some are non-qualifying most are through qualification.

Balloon Payment
A loan with monthly payments insufficient to pay off the balance in the specified term; the balance must be paid in full when the loan comes due.

Broker (Mortgage)
An individual or company that for a fee acts as an intermediary between borrowers and lenders.

Broker (Real Estate)
A person who has a real estate broker's license, who may not only make real estate transactions for others in exchange for a fee, but also may operate a real estate business and employ salespersons and other brokers.

Cap
A provision of an ARM limiting how much the interest rate or mortgage payments may increase or decrease.

Cash Reserve
A requirement of some lenders that buyers have sufficient cash remaining after closing to make the first two monthly mortgage payments.

Clear Marketable Title
A title that is free of liens or legal questions as to ownership of property.

Closing
The meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing cost. Also known as "settlement."

Closing Costs
Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Also called "settlement costs."

Community Home Buyer's Program
An alternative financing option that allows households of modest means to qualify for mortgages using nontraditional credit histories, 33 percent housing-to-income and 38 percent debt-to-income ratios, and the waiver of the usual two payments cash reserves at closing.

Condominium - A form of property ownership in which the homeowner holds title to an individual dwelling unity plus an interest in common areas of a multi-unit project, and sometimes the exclusive use of certain limited common areas.

Contingency
A condition that must be met before a contract is legally binding.

Conventional Mortgage
Any mortgage that is not insured or guaranteed by the federal government.

Convertible ARM
An adjustable-rate-mortgage that can be converted to a fixed-rate mortgage under specified conditions.

Cooperative
A type of multiple ownership in which the residents of a multi-unit
housing complex own shares in the corporation that owns the property, giving each
resident the right to occupy a specific apartment or unit.

Covenant
A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

Credit Report
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's credit worthiness.

Debt-to-Income Ratio
Formula used to qualify borrowers. The ratio expresses, as a percent, the amount of monthly debt payments in relation to the amount of monthly income of a borrower(s).

Deed
The legal document conveying title to a property.

Deed of Trust
The document used in some states instead of a mortgage; title is conveyed to a trustee rather than to the borrower.

Default
The failure to make a mortgage payment on a timely basis or to otherwise comply with other requirements of a mortgage.

Delinquency
A loan in which a payment is overdue but not yet in default.

Depreciation
A decline in the value of a property; the opposite of "appreciation."

Disclosure
Document which describes all conditions of mortgage loan including terms and interest rates.

Discount Points
A one time charge by the lender to increase the yield of the loan. A point is one percent of the amount of the mortgage.

Down Payment
The part of the purchase price which the buyer pays in cash and does not finance with a mortgage.

Due-on-Sale Clause
A provision in a mortgage allowing the lender to demand repayment in full if the borrower sells the property securing the mortgage.

Earnest Money
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Equal Credit Opportunity Act (ECOA)
A federal law that prohibits lenders from denying mortgages on the basis of the borrower's race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Equity
A homeowner's financial interest in a property. Equity is the difference between the fair market value of a property and the amount still owed on the mortgage.

Equity Loan
A loan based on the borrower's equity in his or her home.

Escrow
The holding of documents and money by a neutral third party prior to closing; also, an account held by the lender (or servicer) into which a homeowner pays money for taxes and insurance.

Exclusive Agency Listing
A listing contract in which the agent has the sole right to sell the home, though the sellers are not bound to pay the commission if they produce the buyer.

Exclusive Right-to-Sell Contract
A listing contract in which the seller gives the real estate broker the sole right to sell; the person receives a commission, regardless of who produces the buyer.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer/credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

FHA Mortgage
A mortgage that is insured by the Federal Housing Administration. Also referred to as a "government" mortgage.

First Mortgage
A mortgage that has first claim in the event of default.

Fixed Rate Mortgage
A mortgage in which the interest rate does not change during the entire term of the loan.

Flood Insurance
Insurance that compensates for physical property damages resulting from flooding. It is required for properties located in federally designated flood areas.

Forbearance
The lender's postponement of foreclosure to give the borrower time to catch up on overdue payments.

Foreclosure
The legal process by which a mortgaged property may be sold when a mortgage is in default.

Graduated Payment Mortgage (GPM)
A mortgage that starts with low monthly payments that increase at a predetermined rate. The initial monthly payments are set at an amount lower than that required for full amortization of the debt.

Hazard Insurance
Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.

Homeowner's Insurance
An insurance policy that combines personal liability coverage and hazard insurance coverage for a dwelling and its contents.

Homeowner's Warranty (HOW)
A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by the builder or property seller as a condition of the sale.

Impound
The portion of a borrower's monthly payments held by the lender to pay taxes, hazard insurance and mortgage insurance.

Index
The interest rate to which changes in an adjustable-rate-mortgage are pegged.

Interest Rate
The fee charged for borrowing money.

Judicial Foreclosure
A court procedure used by lenders to secure clear title to a property under a defaulted real estate loan.

Jumbo Loan
A loan which is larger (more than $322,700) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.

Late Charge
The penalty a borrower must pay when a payment is made after the due date.

Lien
A legal claim against a property that must be paid off when the property is sold.

Lifetime Cap
A provision of an ARM that limits the highest rate that can occur over the life of the loan.

Listing Contract
A contract with a broker or firm the sellers hire to represent them in the sale of their home, according to the terms of sale that they specify. In exchange for producing a ready-willing-and-able buyer, the agent is paid a commission.

Loan Application Fee
A lender's fee, usually ranging from $75 to $300, which the buyer must pay when applying for a mortgage.

Loan Commitment
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer.

Loan Origination Fee
A fee charged by the lender for processing a mortgage.

Loan Servicing
The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Loan-to-Value Ratio (LTV)
The relationship between the unpaid principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property.

Lock-In
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.

Margin
The set percentage the lender adds to the index rate to determine the current interest rate of an ARM.

Market Rate
The average rate charged by lenders for conventional, fixed-rate loans.

Mortgage Banker
A company that originates mortgages exclusively for resale in the secondary market.

Mortgage Broker
An individual or company that for a fee acts as an intermediary between borrowers and lenders.

Mortgage Insurance
(Also known as Private Mortgage Insurance (PMI)) Insurance provided by nongovernmental insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) ratios greater than 80 percent.

Mortgage Insurance Premium (MIP)
The fee paid by a borrower to FHA or a private insurer for mortgage insurance.

Mortgage Note
A legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time; the mortgage note is secured by a mortgage.

Mortgagee
The lender in a mortgage agreement.

Mortgagor
The borrower in a mortgage agreement.

Multiple Listing Service (MLS)
A networking system, frequently on computer, in which a number of real estate firms share information about their client's homes that are for sale.

Negative Amortization
A gradual increase in the mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due. The amount of the shortfall is added to the unpaid principal balance to create "negative" amortization.

Notice of Default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Offer to Purchase and Acceptance
An offer of purchase that has been signed by both buyer and seller. A firm contract that outlines all details of the property transaction. Also known as a contract of sale or sales contract.

Offer to Purchase or Purchase Offer
A document that list the price, conditions, and terms under which the buyer is willing to purchase a property. Also known as an earnest money agreement, contract of purchase or deposit receipt.

Open Listing
A listing contract in which sellers hire more than one firm or person to sell their home, and only the one who produces the buyer is entitled to the commission,

Origination Fee
A fee paid to a lender for processing a loan application; it is stated as a percentage of the mortgage amount.

Payment Cap
A provision of some ARM's limiting the amount by which a borrower's payments may increase regardless of any interest rate increase; may result in negative amortization.

PITI
Acronym for principal, interest, taxes, and insurance
the components of a monthly mortgage payment.

Points
A one time charge by the lender to increase the yield of the loan; a point is 1 percent of the amount of the mortgage.

Pre-approval
The process of determining that a borrower is credit approved up to a predetermined amount. The borrower is credit approved pending the locating of a home that meets the predetermined loan criteria.

Prepayment Penalty
A fee that may be charged to a borrower who pays off a loan before it is due.

Prequalificiation
The process of determining how much money a prospective home buyer will be eligible to borrow before a loan is applied for.

Principal
The amount borrowed or remaining unpaid; also, that part of the monthly payment that reduces the outstanding balance of a mortgage.

Private Mortgage Insurance (PMI)
Insurance provided by nongovernmental insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80 percent.

Purchase and Sale Agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Qualifying Ratios
Guidelines applied by the lenders to determine how large a loan to grant a home buyer.

Radon
A radioactive gas found in some homes that in sufficient concentrations can cause health problems.

Rate Lock
A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing. Also known as Lock-in.

Real Estate Agent
A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Realtor
A collective membership mark that may be used only by real estate professionals who are members of the National Association of Realtors and subscribe to its strict code of ethics.

Refinancing
The process of paying off one loan with the proceeds from a new loan using the same property as security.

Reverse Mortgage
Also called "equity conversion mortgage," these loans permit senior citizens to convert the equity in their homes to income. The lender makes monthly cash payments to the homeowner, and repayment is deferred for a set period or until the homeowner dies and the house is sold.

Second Mortgage
A mortgage that has a lien position subordinate to the first mortgage.

Secondary Market
The buying and selling of existing mortgages.

Seller Take-Back
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.

Settlement
The meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing cost. Also known as "Closing."

Settlement Sheet -The computation of costs payable at closing that determines the seller's net proceeds and the buyer's net payment.

Survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Tenancy by Entirety
A type of joint ownership of property that provides right of survivorship and is available only to a husband and wife.

Tenancy in Common
A type of joint ownership in a property without right of survivorship.

Title
A legal document evidencing a person's right to or ownership of a property.

Title Company
A company that specializes in examining an insuring titles to real estate.

Title Insurance
Insurance to protect the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of property.

Title Search
A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

Treasury Securities
Treasury securities and T-Bills are common indexes for adjustable rate mortgages (ARMS).

Truth-in-Lending (TIL)
A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage including the "annual percentage rate (APR)" and other charges.

Underwriting
The process of evaluating a loan application to determine the risk involved for the lender. It involves an analysis of the borrower's credit worthiness and the quality of the property itself.

VA Loan
A loan that is guaranteed by the Department of Veterans Affairs. Also referred to as a "government" mortgage.

Variable Rate Mortgage
Adjustable Rate Mortgage.

Vested
One has a right to use a portion of a fund, such as an individual's retirement fund.

Zero Percent Financing
A loan with no interest in the contract. The IRS imputes 10 percent for both borrower and lender.

Zoning
The right of a community, under its police power, to dictate the use of property within its boundaries.