Mortgages for the Purchase of New Home in Maryland, Northern Virginia and Washington DC
Larry Cadenhead provides his mortgage clients with a number of different options of mortgages and financing structures in order best fit their unique situation and preferences. Generally, the loans we offer to our clients fit into one of three broad categories: FHA and VA mortgages, hybrid mortgage loans, and specialty mortgage loans.
FHA and VA Mortgages
This category of mortgage loans includes loans such as the fixed rate mortgage, FHA loans, VA loans, interest only loans, and jumbo loans. A fixed rate mortgage is a mortgage whereby the borrower pays a fixed interest rate on the money borrowed over a set period of time. FHA (Federal Housing Authority) mortgages are loans that are insured by the government and funded into the loan are the insurance costs. A VA loan, or Veteran’s Affairs loan, is a government guaranteed home loan. An interest only mortgage contains an option, which allows the borrower to pay merely the interest rather than the full monthly amount required. The jumbo loan is a loan that exceeds $453,100. The jumbo loan can either be fixed rate, interest only, or have an adjustable rate.
Who Qualifies for VA Home Loans?
Eligible veterans and their families can qualify for VA Home loans. Veterans must have a Certificate of Eligibility (COE). Unmarried surviving spouses of veterans who died on active duty or as the result of service-connected disabilities are also eligible for VA home loan guarantees. Some of the benefits of VA Loans include: No need for mortgage insurance, no down payment and no maximum loan amount.
The hybrid category of loan includes more complicated varieties of mortgages including adjustable rate mortgages (ARM), option ARM’s, combo/piggyback mortgages, and mortgage buy-downs. An ARM is a mortgage where the interest rate charged will change at specified time intervals to correspond to some benchmark interest rate. The option ARM is the ARM plus the borrower has the option to choose a variety of payments and interest rates. Borrowers must beware of the minimum payment option as it may result in negative amortization, i.e. when a payment does not cover interest payment the unpaid interest is added to the principal amount of the mortgage. A combo/piggyback mortgage is made up of a first and second mortgage loan and is used by the borrower to avoid paying for private mortgage insurance when the down payment is less than twenty percent of the homes value. A mortgage buy-down is for home purchasers who desire a lower initial interest rate by paying fees. The home purchaser, the seller, or the lender may buy down the interest rate for the home purchaser.
The final group of mortgages has mortgages known as specialty mortgages and includes streamlined-K mortgages, bridge/swing mortgages, equity mortgage loans, and reverse mortgages. The streamlined-K mortgage is similar to the 203-K handyman loan mortgage, but has lower dollar limits for the repair work to be performed and it has a reduced amount of paperwork and is easier to obtain. A bridge/swing loan is employed when a seller with a home on the market to be sold has found another home they would like to purchase; the existing home is used as security for the loan. Equity mortgage loans are when the borrowers reduce their equity in the home and receive cash or a line of credit from the lender, and the loan is junior to the original mortgage on the property. A reverse mortgage is for persons over the age of 62 who have sufficient equity in their existing home. The lender makes payments to the homeowner for as long as the homeowner resides in the home, when the house is sold the lender takes a portion of the sale price.