Loan Programs

What Loan Program Is Best For Me?

What Loan Program Is Best For Me?

• Fixed Rate Mortgages• FHA Loans• USDA Loans• Adjustable Rate Mortgages• VA Loans• JUMBO Loans• Construction Loans• Home Equity Line of Credit• Bridge Loans• Renovation Loans• Down Payment Assistance Loans

Fixed Rate Mortgages

A Fixed Rate Mortgage ensures that your payments will stay the same over the life of the loan. This has the obvious advantage of enabling you to calculate your monthly expenses without worrying about fluctuations in your mortgage payments over time.

You pay a slightly higher interest rate than you would with an Adjustable Rate Mortgage Loan (ARM), to get the lender to commit to lending you money over the full term of the mortgage. However, if interest rates fall, you may always opt to refinance to a lower rate for the purpose of simply lowering your payment, or cashing out all or some of the equity you have accrued.

For more information on fixed rate mortgages, visit www.novahomeloans.com

FHA Home Loans

FHA loans have been helping people become homeowners since 1934. How do they do it? The Federal Housing Administration (FHA) - which is part of HUD - insures the loan, so we can offer you a better deal.

• Low down payments• Low closing costs• Easy credit qualifying

For more information on FHA home loans, visit www.novahomeloans.com

USDA Home Loans

A USDA loan (also called a Rural Development Loan) is a government insured home loan that allows you to purchase a home with NO Money Down. USDA Home Loans offer 100% financing to qualified buyers, and allow for all closing costs to be either paid for by the seller or financed into the loan. USDA offers some the lowest rates of any loan, and you will always have a fixed interest rate. To be eligible for a USDA loan, the homebuyer must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located.

Want to learn more about USDA loans? Our Loan Officer can help you learn more about qualifications and eligibility.

For more information, visit www.novahomeloans.com

Adjustable Rate Mortgages

With an ARM, your interest rate is fixed for a given period of time, depending on the term you have chosen, typically 1, 3, 5 or 7 years. ARM loan rates are typically lower than the longer fixed rate terms described in this section. Your interest rate will increase each year after completion of the fixed period. These predetermined adjustments define the amount of interest rate increase you may incur during each adjustment period, and also the maximum interest rate you could be charged over the life of the loan.

For more information on adjustable rate mortgages, visit www.novahomeloans.com

VA Loans

A US Department of Veteran's Affairs (VA) Loan allows qualified veterans to buy a house costing up to $417,000 without a down payment. Additionally, the qualification guidelines for VA Loans are more flexible than for either FHA or Conventional Loans. For qualified veterans, this can be a very attractive option.

To determine your eligibility, contact your nearest VA regional office. Loan Officers at NOVA will be able to answer your questions and determine which options will be the most advantageous for you.

Jumbo Loans

If a conventional loan falls within Fannie Mae's and Freddie Mac's loan limits, it is referred to as a Conforming Loan. If the loan amount exceeds the maximum permissible loan amount of these two agencies, it is called a JUMBO, or Non-Conforming Loan.

Conventional lenders typically insist that the borrower put down more than 20% on a JUMBO loan. Interest rates on JUMBO loans generally run between 3/8% to 1/2% higher than Conforming Loans. The difference in the interest rate between Conforming and JUMBO loans is higher when mortgage money is not plentiful. The difference typically decreases with the abundance of mortgage money.

Construction Loans

Construction Loans are specialized and require a lender with knowledge of the process.

One Time Close ConstructionWhen rates are low it's the ideal time to take advantage of the One Time Close Construction Loan. Your rate will never change from the beginning of construction through the life of the loan. And, you pay only one set of closing costs.

Two Time Close ConstructionWhen interest rates are on the rise, it's usually better to do a Two Time Close Construction Loan because the initial loan covers only the cost of construction and can be configured as an "interest only" loan. 3/1 or 5/1 ARMs (Adjustable Rate Mortgages, fixed for 3 or 5 years), are usually recommended for this purpose because they traditionally carry a lower interest rate. Lower interest rates help to keep payments low during the construction process.

Construction Loans

New ConstructionConstruction loans used for new homes generally pay the builder or general contractor in installments or "draws", as each previously agreed upon stage of construction is satisfactorily completed. Interest is paid by the borrower on these construction funds as they are dispersed. After completing a project, the construction financing is usually converted into a permanent, long-term mortgage.

Other ConsiderationsConstruction loans may also be the most appropriate choice for extensive remodeling projects because in most cases, they provide the owner with more money than can be accessed from the home's equity through a Cash-Out Refinance.

Home Equity Line of Credit(aka Heloc)

Equity can be defined as the difference between what your house is worth in today's market, and how much you currently owe for the property. For example, if your home is appraised at $225,000 and you have an outstanding balance of $75,000, then you have $150,000 of home equity.

With this in mind, a Home Equity Loan is basically a line of credit secured by a second mortgage on a property. You can borrow against what you have already paid, so long as you don't exceed the maximum loan amount previously agreed to by you and the lender.

Bridge Loans

If you find yourself in the position of having to buy a new house before selling your old one, you may benefit from a Bridge Loan. A Bridge Loan enables you to borrow against the equity that is tied up in your old home until it sells. There are several risk factors to consider before deciding that a Bridge Loan is right for you.

If your old house doesn't close quickly, you could wind up paying for two houses longer than you had anticipated. This effectively forces you to pay three mortgages (the first one for your old home, the second for the Bridge Loan and the third for your new home). Combine this with the prospect of paying two property tax bills, two premiums for homeowners insurance and two sets of utility bills. These can add up quickly.

For more information on bridge loans, visit www.novahomeloans.com