NJ Loan Programs
FHA Mortgage Loans
The Federal Housing Administration (FHA), which is part of the U.S. Dept. of Housing and Urban Development (HUD), administers various mortgage Loan programs. FHA loans have lower down payment requirements (3%) and are easier to qualify than conventional loans. They are more forgiving of bad credit than conventional loans. Buyers of homes in New Jersey for sale often choose this option when credit restrictions are tighter. Simply put…these are government loans.
Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, packages the mortgages into securities and sell the securities to investors.
Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announces new loan limits every year. Properties with five or more units are considered commercial properties and are handled under different rules.
To Get Information about a Specific Type of NJ Mortgage Program, Please Fill Out the Form Below and a Loan Officer will contact you shortly.
Jumbo Mortgage Loans
Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as ‘jumbo’ loans. Because jumbo loans are bought and sold on a much smaller scale, they often have a little higher interest rate than conforming, but the spread between the two varies with the economy. They generally carry substantially higher interest rates as well. Qualification for these loans is harder.
B/C Mortgage Loans
Loans that do not meet the borrower credit requirements of Fannie Mae and Freddie Mac are called ‘B’, ‘C’ and ‘D’ paper loans vs. ‘A’ paper conforming loans. B/C loans are offered to borrowers that may have recently filed for bankruptcy, foreclosure, or have had late payments on their credit reports. Their purpose is to offer temporary financing to these applicants until they can qualify for conforming “A” financing. The interest rates and programs vary, based upon many factors of the borrower’s financial situation and credit history.
Please note, “B” and “C” loans are are VERY scarce as of 2007!
Fixed Rate Mortgage Loans
With fixed rate mortgage, the interest rate and your mortgage monthly payments remain fixed for the period of the loan. Fixed-rate mortgages are available for 40, 30, 25, 20, 15 years and 10 years. Generally, the shorter the term of a loan, the lower the interest rate you could get. The longer the term, the lower the payments you will have.
To Get Information about Getting Prequalified for a Mortgage, Please Fill Out the Form Below
Adjustable Rate Mortgage Loans
Variable or adjustable loan is loan whose interest rate, and accordingly monthly payments, fluctuate over the period of the loan. With this type of mortgage, periodic adjustments based on changes in a defined index are made to the interest rate. Typically, your rate is fixed for a number of years, then starts to adjust according to the index.
These are the most basic types of mortgage loans you can get. For more detailed information, please visit the following link: Homes NJ for Sale