types of mortgages

Most people finance their new home, and with so many types of loans available, it can be overwhelming to choose the right one.  We can work with any lender, though we do have lenders specific to financing the unique manufactured home industry.

• Interest Rate: Stays the same for the entire term of the loan.
• Terms: Typically 15, 20, or 30 years.
• Pros: Predictable monthly payments, good for long-term stability.
• Cons: Generally higher initial interest rates compared to adjustable-rate mortgages.

• Interest Rate: Variable; starts with a lower fixed rate for an initial period (e.g., 5, 7, or 10 years) and then adjusts periodically based on a market index.
• Terms: Commonly 5/1, 7/1, or 10/1 (fixed years/adjustment frequency).
• Pros: Lower initial interest rates, potential for lower payments in the short term.
• Cons: Rates and payments can increase significantly after the initial fixed period.

• Down Payment: As low as 3.5%.
• Credit Requirements: More lenient; ideal for first-time buyers or those with lower credit scores.
• Mortgage Insurance: Requires both upfront and annual mortgage insurance premiums (MIP).
• Pros: Lower down payment and credit score requirements.
• Cons: Mortgage insurance can make monthly payments higher.

• Eligibility: Available to veterans, active-duty service members, and certain members of the National Guard and Reserves.
• Down Payment: Often zero down payment required.
• Mortgage Insurance: No mortgage insurance, but there may be a one-time funding fee.
• Pros: No down payment, no PMI, competitive interest rates.
• Cons: Only available to eligible veterans and service members.

• Eligibility: For rural and suburban homebuyers with low-to-moderate incomes.
• Down Payment: Zero down payment required.
• Mortgage Insurance: Requires an upfront fee and an annual fee, similar to PMI.
• Pros: No down payment, favorable interest rates for qualifying borrowers.
• Cons: Geographic and income restrictions apply.

• Loan Amount: Exceeds conforming loan limits set by Fannie Mae and Freddie Mac (currently $726,200 in most areas).
• Interest Rate: Usually higher than conforming loans.
• Down Payment: Typically 10% to 20%.
• Pros: Allows purchase of high-value properties.
• Cons: Stricter credit requirements and larger down payment needed.

• Payment Structure: Payments cover only the interest for a specified period (usually 5-10 years), after which the loan becomes fully amortizing.
• Pros: Lower initial monthly payments, good for those with fluctuating income.
• Cons: Payments can increase substantially once the interest-only period ends.

• Payment Structure: Smaller monthly payments for a set period (typically 5-7 years) followed by a large “balloon” payment of the remaining balance.
• Pros: Lower initial monthly payments.
• Cons: Risk of large payment due at the end, requiring refinancing or payoff.

• Eligibility: Available to homeowners 62 and older.
• Payment Structure: The lender makes payments to the homeowner based on the home’s equity.
• Pros: Provides income to seniors, no monthly mortgage payments required.
• Cons: Reduces home equity, can be complex with fees and terms to consider.

• Loan Amount: Meets guidelines set by Fannie Mae and Freddie Mac.
• Down Payment: Typically 3% to 20%.
• Mortgage Insurance: Required if down payment is less than 20%.
• Pros: Flexible terms, no specific eligibility requirements.
• Cons: Stricter credit and down payment requirements compared to FHA and VA loans.