Fixed Rate Mortgages (FRM)
The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime. You might choose a loan like this if you or your loan adviser believe that rates are exceptionally low. It’s also a great choice if you plan to stay in the house for a long (20 years+!) time.
Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting. These are somewhat uncommon now that Hybrid ARMs exist, but they’re still a great choice when rates are high but you or your loan adviser believe they will go lower. It’s also a good fit for shorter mortgages, since it will always be less expensive in the short term than fixed rates.
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages combine features of both fixed-rate and adjustable rate mortgages and are also known as fixed-period ARMs. These mortgages fix a rate for the first number (3/1, 5/1) of years to “lock in” a lower rater and then turn into adjustable rate mortgage. This is an extremely appealing type of mortgage for people who only plan to be in a house for the number of years where the rate is fixed. There’s simply no reason to pay a premium for a fully fixed rate when you will be moving on. Our mortgage broker friends from Australia explain it well, and you can read more about Hybrid ARMs here.
HARP 2.0
HARP 2.0 is a refinance option for homeowners that are "underwater," meaning they owe more on their home than their home is worth. This can only really occur when housing prices drop significantly, since a down payment covers small fluctuations in value.
FHA Loans
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment. It has strict requirements and limits but if it works for you, it’s a great option. You can speak with one of our loan officers today and see if an FHA is a good choice!
VA Loans
VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership.
Interest Only Mortgages
Interest only mortgages are home loans in which borrowers make monthly payments solely toward the interest accruing on the loan, rather than the principle, for a specified period of time. These are increasingly rare because rates are currently so low and interest only mortgages caused a lot of issues during the Great Recession.
Reverse Mortgages
Reverse Mortgages allow senior homeowners to convert a portion of their home equity into cash while still living in the home. They’re a complex way to do things, and it’s essential to work with a trusted lender like American Freedom Funding so that you know everything involved with the process. They are not the same as a cash out refinance, despite common misconceptions!
Get loan proceeds up to $4 Million* with no monthly mortgage payment*
Establish a line of credit that can grow over time
Diversify retirement finances, start a new business, or create savings for the future
No pre-payment penalties or mortgage insurance premiums
Closing cost credits and zero organization fees on participating products
Available to borrowers 55 and older in some states**
VOE Only Program
No Pay stubs. No W-2's. No Tax Returns. No Problem!
VOE from a Verifiable Company, must have 2 year work history
Mortgage Insurance Required with LTV over 80%
MIN 5% Must be borrowers own funds; cannot be gift.
No 4506 Required
620 Minimum Credit Score (all Borrowers)
Cash-Out available to 80% Ltv
PITI Reserve Requirement per AUS System
NOT available for "High Balance" conforming loan amounts
