Ventura County, Los Angeles County California Home Loan

Fixed Rate Loans

With a fixed-rate mortgage (FRM) loan the interest rate and your monthly mortgage payments remain fixed for the period of the loan. Fixed-rate mortgages are available typically for 40, 30, 20, and 15 year terms. Generally, the shorter the term of a loan, the lower the interest rate you could get. The most popular mortgage terms are 30 and 15 years. With the traditional 30-year fixed-rate mortgage your monthly payments are lower than they would be on a shorter term loan. But if you can afford higher monthly payments a 15-year fixed-rate mortgage allows you to repay your loan twice as fast and save more than half the total interest costs of a 30-year loan. The payments on fixed-rate fully amortizing loans are calculated so that at the end of the term the mortgage loan is paid in full.

Fixed period ARMs

With fixed-period ARMs homeowners can enjoy from three to ten years of fixed payments before the initial interest rate change. At the end of the fixed period, the interest rate will adjust annually. Fixed-period ARMs -- 30/3/1, 30/5/1, 30/7/1, and 30/10/1 -- are generally tied to the one-year Treasury securities index. ARMs with an initial fixed period usually have an adjustment cap. First adjustment caps vary with the type of loan program. The advantage of these loans is that the interest rate is lower than for a 30-year fixed, but you still get the advantage of a fixed rate for a period of time.

Adjustable Rate Loans

With a fixed rate mortgage, the interest rate stays the same for the life of the loan. But with an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.

Interest-Only Loans

The loan product commonly called 'Interest-Only Mortgage' is an interest-only payment option which is offered on fixed rate (FRM) or adjustable rate (ARM) mortgages. The option to pay 'interest-only' lets you pay only the interest portion of your monthly payment for a fixed period (3, 5, 7 or 10 years). At the end of that period your loan becomes fully amortized, thus resulting in greatly increased monthly payments. Your new payment will be larger than it would have been if it had been fully amortized from the beginning. The longer the interest-only period, the larger the new payment will be when the interest-only period ends.  Interest-only payment plans are for borrowers who expect to earn a lot more in a few years and want to maximize their buying power now or who will invest the difference between an interest-only and and amortizing mortgage payments, and who are confident that these investments will make money.

 

 

 

 

FHA and VA Loans

The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low downpayments, which typically run around 3 percent, and have relatively easy requirements. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!

In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!

 

 

 

With a variety of different loan programs available, it is important to choose the type of loan that will best suit your needs. 

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