Mortgage Partners/Home Lenders of America, Inc. offers many different loan programs in the states of Connecticut,
Florida, Maine, Massachusetts, New Hampshire, Pennsylvania, and Vermont.Information provided by borrowers via their loan applications and documentation helps determine what loan program(s) are available.Variables that make a difference in what kind of loan programs can be offered include borrower’s credit history and scores, income, assets, equity in the subject property, and purpose of the loan.
Since the summer of 2007, the importance of a borrower’s credit score in determining a loan’s rate and availability cannot be over emphasized.There are common sense steps that any potential borrower can take to ensure that his/her credit is in good shape.Go to www.annualcreditreport.com, the only authorized source for consumers to access their annual credit report online for free, and request your credit report from Experian, Equifax and TransUnion.Then examine each report for any errors; if there are errors contact each of the three Credit Repositories to have the information changed or the dispute noted.
If you find that the amount of debt is depressing your scores, then create a budget and plan to repay your debt on a consistent basis by prioritizing your bills. If your credit score has been harmed or you have little credit, find credit products that will help rebuild your credit such as secured credit cards.
If your debt to income ratio is high and/or if you have poor credit then you are considered a greater risk and likely will pay more for your interest rate. Loans may be available but you probably won’t get the best interest rate in the market.
Note that mortgages with less than a 20% down payment generally require mortgage insurance.
Below is a partial list along with a brief description of each program. For a complete list, please contact us at 866-805-4722.
The interest rate on a fixed rate loan remains the same throughout the life of the loan. Fixed rate loans are offered in terms that range from 10 years to 40 years (15, 20, 25 and 30 year terms are available). Borrowers can appreciate the predictability of a fixed rate loan as payments do not change during the life of the loan, and borrowers are protected from potentially significant increases in interest rates. Each month with a fixed rate loan, a portion of the principal is paid along with interest. At the beginning of the loan, a borrower pays more interest than principal in the monthly payment, but as time goes on, the principal amount paid increases while the interest portion of the loan decreases. Note that the 40-year term does not always offer the best payment, as 40 year interest rates tend to be penalized.
The 30 year term is the most popular as it offers the lowest monthly payments. The downside is that if held for the full 30 year period, a great deal of interest is paid due to its longer term. The monthly payments for shorter-term mortgages are higher so that the principal is repaid in a shorter time frame, but if you can afford them they are a good deal, as the interest rates tend to be a bit lower. We are fans of the 20 year term; an excellent combination of low interest rate with manageable payments. See if this term might work for you. Use our mortgage calculators to see how payments, and monthly principal/interest, vary with different term lengths.
The interest rate of adjustable rate loans varies over time. The initial rates on these loans are set lower than fixed rates for a specific introductory period. After this introductory period the rate (tied to a pre-selected index plus a margin) adjusts at a pre-set frequency. Adjustment frequency can be monthly, yearly, etc. Adjustable rate loans have more working “parts” to them than a fixed rate loan, and borrowers need to understand how they work to see if an adjustable rate loan is best for their circumstances. As of March, 2008, approximately one in five loans were adjustable. ARMs might be appropriate for borrowers who, knowing they will be in a home for a short period of time and/or know that their income will steadily increase, find that the low initial rate of an ARM is more attractive than paying a higher interest rate for a fixed rate loan.
There are two factors that determine how ARM rates are set – the index and the margin. Each ARM is tied to a specific index. Indices (the plural for “index”) include the One-Month London Interbank Offered Rate (LIBOR), the 12-month Moving Treasury Average (MTA or MAT), one year Constant Maturity Treasury (CMT), the 11th District Cost of Funds Index (COFI), and Prime. Each index responds to the financial market in its own unique way. Indices can be divided roughly into two different groups – those that are set to rate averages and those that are set to spot rates. In general, indices set to rate averages tend to move more slowly, whether the market is thriving or failing. ARMS tied to spot rates will go up and down more rapidly and in larger steps. The COFI and MTA (MAT) indices are set to rate averages; the LIBOR is a popular, spot-rate based index.
To determine the rate, a few percentage points are added to the index. This is the margin. The fully indexed rate is the total of the margin plus the index. ARMS also have typically two types of “caps.” There will be a periodic adjustment cap that will limit the amount the interest rate can adjust up and down from one adjustment period to the next after the first adjustment, and there are lifetime caps that limit the interest rate increase over the life of the loan.
An FHA loan is a government mortgage backed by the Federal Housing Administration. The FHA doesn’t lend the money itself – that’s done by lenders – but the FHA does guarantee the loan so lenders take less financial risk when offering these loans. FHA loans come in 15 and 30 year terms. One of the most popular FHA loan programs offers the borrower the ability to put as little as 3% down, finance allowable closing costs, and allow up to 100% of the money for closing to be a gift from a relative, nonprofit organization or government agency. Also, the seller can contribute up to 6% of the purchase price to the buyer toward closing costs. FHA mortgages were out of favor from about 2002 to 2007 because FNMA (Fannie Mae) and FHLMC (Freddie Mac) introduced very similar products. However, with the recent mortgage meltdown, Fannie and Freddie have eliminated or restricted most of these formerly competitive products. This means that FHA loans are a great product for first time home buyers, and also work well when purchasing multi-family properties.
The biggest downside to FHA loans is the mortgage insurance premium (MIP). The borrower pays 1.5% of the purchase price at closing (which can be financed into the loan) along with a .5% annual renewable MIP. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment.
A new program offered by the FHA is FHASecure - a refinancing option that gives homeowners with non-FHA adjustable rate mortgages (ARMs), whether current or delinquent and regardless of reset status, the ability to refinance into a FHA-insured mortgage.
Mortgage Partners/Home Lenders of America is happy to offer FHA loans in Connecticut, Maine, Massachusetts, New Hampshire, and Pennsylvania. More information on FHA loans can be found here.
Backed by the Veterans Administration and the federal government, VA mortgages are terrific for consumers who are either a qualified Veteran or active military personnel. VA mortgages are the best loan product available.
Think about this: VA loans have zero down payment and no private mortgage insurance or mortgage insurance premiums! They also allow seller’s assists with closing costs. This is a wonderful program for first-time home buyers. If you already have a VA loan, the Veterans Administration makes it easy to refinance with their Rate Reduction Refinance Program, no appraisal required! To apply for a VA loan, veterans will need a certificate of eligibility from the Veterans Administration.
Frequently asked questions and further information may be found at the Veterans Administration web site.
A jumbo mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. This standard is set by the two largest secondary market lenders, Fannie Mae and Freddie Mac. Jumbo loans are very similar to conventional loans and are offered in a variety of fixed rate terms as well as ARM products. These loans usually require a higher percentage down payment and the interest rate charged is generally higher than that of a conforming loan, due to a slightly higher risk to lenders.
Jumbo loan limits are set at $417,000 currently. However, with the passage of the 2008 Economic Stimulus Package, Fannie Mae and Freddie Mac may temporarily purchase loans beyond the prevailing conventional loan These loans are called Agency Jumbos.
What do the new agency jumbos mean for you, the potential borrower? Currently (spring 2008) there seems to be little interest rate difference between the “old” jumbos and the new agency jumbos. This might change over time…stay tuned.
Rural Housing (RHA) loans, guaranteed by the U.S. Department of Agriculture (USDA), are the closest thing most folks can get to the benefits of a VA loan, without having served in the military. We are often asked why or how the federal agency charged with inspecting our food supply has a mortgage loan program. The program’s historical roots are from an era when there were not many financing options available for those who lived in remote, rural areas. And of course, those were the exact areas where most farms were located, hence the RHA loan program tie-in to the USDA. But today, ignore the word “Rural” when investigating RHA loans. True, there are geographic restrictions applied to RHA loans, and very large towns and cities are not eligible for RHA financing, but our experience has been that many communities we generally consider suburban fall under the RHA umbrella. Check with us about whether your town is eligible for RHA financing! We are pleased to offer Rural Housing loans in large parts of New Hampshire, Vermont, Maine, Massachusetts, Connecticut and Pennsylvania.
RHA loans are available with zero down payment, and no monthly PMI! The USDA charges a 2% guarantee fee, much like the VA charges its funding fee, but the 2% fee can be rolled into your loan amount. Sellers can assist with closing costs and escrows, leaving RHA loans as one of the very few options for borrowers who don’t want to put any money down. RHA loans are offered at attractive fixed rates, and even allow you to roll modest property improvement/rehabilitation costs into the loan amount.
For further information on rural housing loans, visit this site.
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.
Building a new home can be an exciting prospect - unless you get caught up in a construction loan approval process that is 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 traditional ARM products.
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, including: No Doc, Limited Doc, and Full Doc. Program may not be available in some states.
Home Equity Conversion Mortgages (HECMs) also called Reverse Mortgages allow homeowners 62 and older to access the equity in their primary residence without having to make required monthly mortgage payments. There are no restrictions on how one uses the loan proceeds and the payments received are tax-free. Before HECMs there were two main ways to get cash from your home: you could sell your home, or you could borrow against your home. Reverse Mortgages provide another way to get money from your home. For many borrowers the ability to stay in their home and/or not have to make regular loan payments is very attractive, and balances out the fact that reverse mortgages have high up front costs.
A reverse mortgage is a loan against your home that you do not have to pay back for as long as you live there. It can be paid to you all at once, as a regular monthly advance, or at times and in amounts that you choose. You pay the money back plus interest when you die, sell your home, or permanently move out of your home. Basic questions to ask include: Is my mortgage fully paid or almost paid? Do I have a substantial amount of equity in my home? Could my family and I benefit from extra income each month? What are the benefits of selling my home?
Reverse mortgages also can be used to purchase homes. An excellent source of information on reverse mortgages can be found at the AARP web site. We LOVE this web site (and it’s not just because we’re inching closer to AARP age)– it’s a must read for anyone interested in reverse mortgages!
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.
Stated and Low Documentation loans allow borrowers to provide reduced or minimal documentation to substantiate income and assets. Usually these loans will contain terms less favorable than if the borrower chose to fully document income and/or assets. Examples of less favorable terms might include higher interest rates, higher fees, and higher margins or caps on adjustable rate mortgages.
Stated and Low Documentation loans typically depend heavily on a borrower's credit score and the mortgage's loan to value ratio (LTV) in determining the borrower's ability to repay the mortgage.
