Types of Loans

*Appraised property value may affect loan amount.

**The cash from equity is usually tax free. This information does not constitute tax advice or financial planning advice. Please consult a tax advisor for tax advice and a financial planner regarding enhancements to retirement plans. Movement Mortgage is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.  Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. Must be at least 62 years old. Loan proceeds are not considered income and will not affect Social Security or Medicare benefits. Your monthly reverse mortgage advances may affect your eligibility for some other programs.  Consult a local program office or your attorney to determine how, or if, monthly reverse mortgage payments might affect your specific situation.  At the conclusion of the term of the reverse mortgage loan contract, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to you and you may need to sell or transfer the property to repay the proceeds of the reverse mortgage with interest from your assets.  We will charge an origination fee, a mortgage insurance premium, closing costs or servicing fees for the reverse mortgage, all or any of which we will add to the balance of the reverse mortgage loan.  The balance of the reverse mortgage loan grows over time and interest will be charged on the outstanding loan balance.  You retain title to the property that is the subject of the reverse mortgage until you sell or transfer the property and you are therefore responsible for paying property taxes, insurance, and maintenance.  Failing to pay these amounts may cause the reverse mortgage loan to become due immediately.  Interest on reverse mortgage is not deductible to your income tax return until you repay all or part of the reverse mortgage loan.

Thirty-Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you’ll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn’t that great.

USDA/Rural Development
USDA home loan programs are primarily designed to help lower income individuals or households purchase homes in rural areas. USDA Rural Development funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.  You can finance 100% of the home value with no down payment or monthly insurance required.  Eligibility for the USDA Rural development loan program is dependent upon income and property location. Applicants for USDA loans may have an income of up to 115% of the median income for the area.  Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance.  In addition, USDA applicants must have reasonable credit histories.

FHA
This mortgage is designed primarily for first-time homebuyers.  FHA mortgage loans are very competitive loan programs. FHA mortgages allow the homebuyer to put down as low as a 3.5% down payment AND have less than perfect credit.  Seller can contribute up to 6% of the purchase price to the buyer towards closing costs. Other benefits of the FHA mortgage loan program may include lower closing costs, down payment can be gifted to the homebuyer, available on 1-4 unit properties, cash reserves not required, closing costs can be paid by seller, flexible qualifying debt to income ratios and streamline refinance available.  FHA Mortgage loans can be fixed-rate or adjustable rate mortgages, but the majority are fixed-rate mortgages.  FHA Mortgage loans require a mortgage insurance premium to be collected at closing (upfront MI) and an annual premium is collected in monthly installments. The FHA mortgage insurance premium in not the same as your homeowner’s insurance and is required of all borrowers with less the 20% LTV. A typical monthly mortgage payment on a FHA mortgage loan includes principal and interest, taxes, monthly insurance premium (MIP), homeowners insurance (assuming you have elected to make monthly payments on your taxes and homeowners insurance).

FHA Streamline Refinance
In order to refinance using the FHA Streamline Refinance program, your mortgage must already be FHA insured. The mortgage to be refinanced should be current (not delinquent). The refinance is to result in a lowering of the borrower’s monthly principal and interest payments. No cash may be taken out on mortgages refinanced using the streamline refinance process. Contact a mortgage loan professional near you to discuss FHA Streamline Refinance opportunities.

FHA 230K Rehab
This is a 30 year fixed rate mortgage program that allows the owner to borrow up to $35,000 for repairs on a house that was recently purchased or being refinanced.  This loan amount can go toward repairing/replacing gutters, roof, downspouts, furnace and central air units, and flooring.  You can also do lead based paint abatement, mold remediation, door and window replacement, and well and septic system replacement.  This loan will NOT cover major structural repairs, additions such as garages, sheds, work shops, etc, or landscaping.

Federal VA Loan
A VA mortgage loan is a federally guaranteed mortgage loan for veterans that does not require a down payment* or private mortgage insurance. This is an excellent benefit for eligible veterans. Private mortgage insurance is usually required if a down payment of 20% is not provided – with the VA mortgage loan both the down payment and private mortgage insurance requirements are waived for veterans.  Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime are eligible to apply for the VA Mortgage Loan. There is a two-year requirement if the veteran enlisted and began service after September 7,1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.  All veterans must qualify for the VA mortgage loan – they are not automatically eligible for the program. The guaranty means the lender is protected against loss if you or a later owner fails to repay the VA mortgage loan.

WHEDA
This loan is specifically designed to help first-time homebuyers in Wisconsin achieve their dream of homeownership.  You can finance up to 97% of the home’s acquisition cost with a safe, affordable mortgage serviced by WHEDA.  You can get into a home with as little as $1,000 in out-of-pocket expenses. This reduces your cash required to close, enabling you to purchase a home sooner.  It’s a low-cost, 30-year fixed interest rate, which ensures your monthly principal and interest payment is affordable and will not increase during the entire life of your loan.  It also has low monthly mortgage insurance premiums.  Qualified applicants must be first-time homebuyers with good credit and an income to support a monthly mortgage payment and contribute $1,000 of their own funds into the loan transaction.  Pre-purchase homebuyer education is required and property must be owner occupied.

Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)
These increasingly popular ARMS—also called 3/1, 5/1 or 7/1—can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a “5/1 loan” has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It’s a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

Adjustable Rate Mortgages (ARM)
When it comes to ARMs there’s a basic rule to remember…the longer you ask the lender to charge you a specific rate, the more expensive the loan.

Annual ARM
This loan has a rate that is recalculated once a year.

Monthly ARM
With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time, so his vulnerability is significantly reduced.

*A down payment is required if the borrower does not have full VA Entitlement, or if the loan amount is greater than $453,100. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit standards, and property limits.