Equal monthly installments for 360 months and then paid in full.

Fixed loans have a range of interest rates directly correlated to whether points (1% of the loan amount) are paid, rebates are given, or no points are charged.  The lowest interest rate will have the highest points.  The loans with rebates to the customer will have the highest interest rates. 

Borrowers generally select the interest rate based on their needs for down payment funds and closing costs.

The longer the term of a mortgage the greater the interest expense, but in the case of a 40 year fixed mortgage, the interest rate will also be higher than a 15 or 30 year mortgage.  Forty year mortgages are not available with an interest-only structure, but effectively, the first ten years will be mainly interest and very little principal reduction.

A borrower who cannot qualify for the thirty year product may choose a 40 year term.  Our advice would be to make sure you will not have a prepayment penalty so that may add additional principal payments to your mortgage and reduce the term.

Most people choose either a 30 year term or 15 year term, depending on their ability to repay and their financing requirements, which makes these loans easier to bundle and sell in the secondary mortgage market. 

Currently 15 year mortgages have an interest rate between .25% to .625% lower, depending on the quality of the borrower's application and credit. 

Even if a borrower prefers the 15 year term, many times it is difficult to qualify for the higher payment and a 30 year term may be preferable for this reason.  The other consideration with a 15 year term is that the income tax deduction will diminish quickly as the portion of the monthly payment that is interest declines.  Obviously, this is the two-edged sword.  A borrower will have greater equity but less of a tax deduction (discuss this with your tax preparer for exact comparisons).

With the 2008 Financial Markets Meltdown, Fannie Mae and Freddie Mac have begun offering higher loan amounts for high cost housing areas.  Here are the maximums for the following counties/areas:

OREGON:

Clackamas, Multnomah, Washington and Yamhill Counties:  $418,750

Jackson County:  $422,500

Deschutes County:  $447,500

WASHINGTON:

Clark and Skamania Counties: $418,750

Jefferson County:  $437,500

King, Pierce and Snohomish counties:  $567,500

San Juan County:  $593,750

This is a Stimulus Package maximum loan amount allowed product and may not be available long term.  Each application must be individually and manually underwritten and approved by the Investors (Fannie Mae or Freddie Mac). 

A percentage of these mortgages are guaranteed by the Veterans Administration for qualifying Veterans who meet a minimum of service as defined by the VA.  We can help you obtain your Certificate of Eligility electronically if your name is in the VA database currently.  (Some newer Vets may not be in the database and may need to electronically apply differently.  We can guide you, don't worry.)  You will need a copy of your DD-214 discharge papers.

Some general information on VA loans is the following:

The VA will not finance any manufactured homes on their delegated Lender program.  One unit properties intended to be owner occupied qualify, but 2 to 4 unit properties do not.  A Vet may only have one outstanding VA loan at a time.  If you allowed someone to assume your VA loan, you will have to wait until it is paid in full before you can re-use your Certificate of Eligibility.  Each time you use your VA loan the fees added to your principal amount will increase.  A VA loan can be used to purchase a home, refinance for cash back or reduce the interest rate on a current VA loan.  Subordinate financing (like second mortgages) are now allowed.  The maximum 100% mortgage amount is $417,000, but Vets may borrow up to a maximum of $700,000 with a down payment on that amount of $94,333.  Down payments for loans above $417,000 are based on a formula that equals 25% of any amount over the $417,000.  Although the VA does not view credit scores with the same jaundiced eye of conventional underwriters, a minimum credit score of 580 is a must.  A low score will also negatively affect an underwriter's decision unless there are other compelling compensating factors. 

Most adjustable rate loans have a fixed period at the beginning of the loan.  Our products offer a fixed 3 year, 5 year and 7 year option.  We also have a convertible to fixed arm that allows conversion just before the first adjustment.

Building a home is more complicated than purchase an existing home for obvious reasons, and financing is slightly more difficult because of the higher risks involved.  The construction loans we broker are an all-in-one product as we combine the construction portion with the long-term mortgage. 

Construction loans do have extra fees (generally two points and lot and progress inspection fees) whether they are blended with the final (take-out) mortgage or not.  Combining the construction and permanet loan, however, not only saves an extra set of closing costs, but also allows the borrower to lock in the final interest rate when closing on the construction portion.  As construction periods can range from 3 or 4 months to 18, depending on the complexity, size and any inclement weather, the final interest rate can often determine whether or not it is practical to build at a particular time.