Maryland, Virginia, D.C. loan programs
Loan Process: application --> settlement
Currently in an ARM? ARM refinance
Many borrowers took out adjustable rate mortgages a few years back, and these are now coming due. If you are one of them, you might find your payment is getting ready to go substantially higher. Talk to us about refinancing out of your ARM loan into a new fixed or ARM loan with a lower rate. If you don't, the odds are your index plus margin will be over 7%.
Even if your current rate is as low as 4.5%, in most cases you will adjust to your cap's maximum of 2% over this. Your new rate would be 6.5% and it will adjust again in another 6 or 12 months. Fixed rates are currently lower than 6.5%, and adjustable rates are even lower. Every month you delay may cost you hundreds of dollars.
ARM coming due- refinance to fixed rate | lower payment, rate
Loan programs include:
- Purchase your house, second home, and investment property with 0 down
- Refinance for ZERO closing costs..
See refinancing mistakes to avoid
- Piggyback loans 80-10-10 | 80-15-5 | 80-20
- No PMI payments with only 10%, 5%, 0% down
- Debt consolidation programs
- Home improvement loans | Rehab | Construction
- Separation and divorce loans
- Investment property | Second homes
Which program is right for me?
Years you plan to stay in the house Recommended program
1-3 3/1 ARM, 1 year or 6 month ARM
3-5 5/1 ARM
5-7 30 year fixed rate is just as good right now
7-10 30 year fixed, 15 year fixed
10+ 30 year fixed or 15 year fixed rate
Fixed rate mortgages
30 year and 15 year fixed
Monthly payments are fixed.. Interest rate does not change.. You are protected if rates rise.. You can refinance if rates go down.
Higher interest rate.. Higher mortgage payments.. Rate does not drop if interest rates improve.
Adjustable rate mortgages
10/1 ARM, 7/1, 5/1, 3/1, 1 month option ARM, MTA
Lower initial monthly payment.. Lower pmt over shorter period of time.. Rates and payments may go down if rates improve..Will qualify for more loan.
More risk.. Payments may change over time.. Potential for future higher payments.
5 year and 7 year balloon
Lower initial monthly payment.. Lower payment over a shorter period of time.. Many balloon home loans offer the option to convert to a new mortgage after the initial term if rates have improved.
Risk of rates being higher at the end of the initial fixed period.. Risk of foreclosure if you cannot make the balloon payment or if you cannot refinance or if you cannot exercise the conversion option.
First time home buyer programs
Lower down payment.. Easier to qualify.. Sometimes programs will offer a lower rate.
May be subject to income (My Community) and property value limitations to be eligible for the program.. May face a recapture tax on the property if you sell the house too soon (HUD home program at 50% discount for police, teachers, military personnel, firefighters, and health care workers).
No points, no fees, and no closing cost programs
Little costs option.. Zero closing cost refinance
Higher rates.. Higher payments..
Bad/imperfect credit programs
Potential for re-establishing credit and improving credit scores if you pay your mortgage on time consistently over time.. Reduce your total monthly debt load when you get cash out through your refinance.
Higher rates.. Not as favorable terms.. More likely a prepayment penalty of some sort. Interest only may not be an option.
Home equity line of credit
Only borrow what you need.. Pay interest only on the outstanding borrowed balance.. As you pay it down you can re-use it just like a credit card.. Interest is usually tax deductible
Rate can change montly.. Maximum interest rate is usually high.. Can slow down and/or prohibit the refinancing of your 1st mortgage.. No closing cost lines usually have termination fees and repayment of closing costs if closed out (not paid off) within 3 years. See Home equity loan mistakes to avoid..
Home equity fixed rate loan
Fixed rate.. Interest usually a tax write off.
Rate is higher than 1st mortgage rate.