FHA Loans 

The Federal Housing Administration was established to encourage home ownership throughout the country with the belief that home ownership increases the stability of a community. Prior to the creation of the FHA, large down payments were required to secure a mortgage loan. At present, a minimum of 3% investment is required by the borrower for the purchase of a home. As an incentive to investors who purchase loans, FHA insures the loan against default, should the borrower fail to repay. FHA guidelines also allow for greater flexibility with regards to credit history and qualifying ratios. The maximum FHA loan amount varies, depending upon where the property is located. FHA charges an upfront Mortgage Insurance Premium (MIP), that is financed, to insure your loan.

FHA Fixed Rate - Available in 15 or 30 year terms.

FHA A.R.M. - Adjustable Rate Mortgage. Offers a lower initial rate that is subject to change annually. Rate can adjust 1% per year, with a cap of 5%. Adjustment is based on the current index at the time of the adjustment period. The index is then added to the margin, typically 2.75. For example: the initial rate is 5%; after year one, the index is 6.25. The index plus the margin would total 9.00. But since there is a 1% annual adjustment cap, the rate is adjusted to only 6%. Applicant must qualify at 2nd year rate.

FHA Buydown - The interest rate is "bought down", usually by 2%. Offers the lower initial payment of an A.R.M., but the guaranteed cap of the end rate. Applicant qualifies at start rate. The rate will adjust 1% per year, for two years.

FHA 203k - This is an excellent program for the purchase or refinance of a home which is in need of repair. Repairs could be as simple as new windows or as extensive as a rebuild from the foundation on up. The extent of the repairs/improvements is limited to the maximum loan amount available.

FHA Streamline Refinance - A simple way to lower the current interest rate, or convert from an A.R.M. to a fixed rate. The only cost is typically the appraisal fee ($ 400.00 approx.). Only the mortgage history is verified; a 12 month history is required. Upon refinancing, the borrower will skip one month's payment and may receive an escrow refund (for taxes and insurance).

FHA Cash-out Refinance - An excellent, cost effective way to pay-off debt or improve your home. The interest one pays on credit cards and other types of non-realty loans is not tax deductible. Mortgage interest, however, is tax deductible. Also the mortgage rate is far less than the rates of credit cards and personal loans. And the repayment term is for a longer period, which greatly reduces the monthly payment.

VA Loans

The Veterans Administration guarantees mortgages for veterans of armed services. A down payment is not required for the purchase of a home, and the seller can pay for all of the veteran's closing costs. VA guidelines allow for greater credit flexibility and qualifying ratios. The maximum loan amount for VA loans is $ 417,000.00 (including VA Funding Fee)(with no downpayment and the veteran has full eligibility). VA charges a guarantee (funding) fee, that is financed, to guarantee the loan for investors purchasing the loan in the event that the buyer fails to repay the mortgage.

VA Fixed Rate - Available in 15 or 30 year terms; maximum loan amount is $ 417,000.00.

VA Jumbo - This program allows veterans to obtain a loan higher than the VA loan limit. However, VA Jumbo loans require a down payment reflective of the loan amount above the threshold. Please contact your Capital Mortgage Finance representative to check for availability.

VA Streamline - A simple way for a veteran to lower their mortgage interest rate. An appraisal is not required, however, an acceptable 12 month mortgage history is required. Proof of income is not required.

VA Cash-out Refinance - Veterans can consolidate debt and make home improvements; the mortgage interest is tax deductible and the interest rate is much lower in comparison to credit cards and personal loans.

Conventional Loans

Conventional loan programs are those without insurance or guarantee by a federal agency. If a borrower is putting less than 20% down, private mortgage insurance (PMI) is required. The rate for PMI will vary depending upon the Loan-to-Value (LTV), Loan Type, and the Term of the Loan. Conventional loan programs have credit guidelines and qualifying ratios that are not as flexible as FHA or VA loans. The maximum loan amount for a conventional loan is $ 417,000.00.

Conventional Fixed - Available in 15, 20, 25 and 30 Year Terms. For purchase transactions, a minimum of 3% is required, and sellers may contribute up to 6%.

Conventional A.R.M. - Available with 1 Year, 3/1, 5/1, and 7/1 adjustment terms. A 1 Year A.R.M. has 2% annual adjustment cap with a 6% lifetime adjustment cap (i.e. Start rate 5%, max adjustment to 11%).

Conventional Balloon - Typically a 7/23 term; after a 7 year repayment term, the balance of the mortgage is due.

Conventional Rehab - Similar to the FHA 203k loan, however, there are fewer improvement restrictions.

Conventional Streamline Refinance - An appraisal is required.

Jumbo Loans

Jumbo Fixed - Available in 15 or 30 Year Terms. Loan amounts from $ 417,001.00 to $ 1,000,000.00.

Construction-Perm Loans

Borrowers who desire to have a home custom built on a lot they have purchased will need a Construction-Perm Loan. This will provide the builder with a series of draws until the construction is finished. Loan repayment during construction is typically interest only. Upon completion, the loan converts to a permanent mortgage with a full PITI payment.