Different Types of Mortgage Loans Explained – 2017 Update, types of mortgages.#Types #of #mortgages


The Different Types of Mortgage Loans in 2017, Explained

By Brandon Cornett | 2017, all rights reserved | Duplication prohibited

What are the different types of mortgage loans available to home buyers in 2017, and what are the pros and cons of each? This is one of the most common questions we receive here at the Home Buying Institute. This page offers some basic information about the types of loans available in 2017. Follow the hyperlinks provided for even more information. And be sure to send us your questions!

Types of mortgages

Loan Reps Are Standing By

Did you know you can get free, no-obligation mortgage quotes online? It’s a great way to get the ball rolling.

If you already understand the basic types of home loans, and you’re ready to move forward with the process, use one of the links provided below. Otherwise, keep reading below to learn about the different financing options available in 2017. You can always come back to these links later on.

Types of Mortgages Available in 2017, Explained

There are many different types of mortgages available to home buyers. They are all thoroughly explained on this website. But here, for the sake of simplicity, we have boiled it all down to the following options and categories.

Option 1: Fixed vs. Adjustable Rate

As a borrower, one of your first choices is whether you want a fixed-rate or an adjustable-rate mortgage loan. All loans fit into one of these two categories, or a combination hybrid category. Here’s the primary difference between the two types:

  • Fixed-rate mortgage loans have the same interest rate for the entire repayment term. Because of this, the size of your monthly payment will stay the same, month after month, and year after year. It will never change. This is true even for long-term financing options, such as the 30-year fixed-rate loan. It has the same interest rate, and the same monthly payment, for the entire term.
  • Adjustable-rate mortgage loans (ARMs) have an interest rate that will change or adjust from time to time. Typically, the rate on an ARM will change every year after an initial period of remaining fixed. It is therefore referred to as a hybrid product. A hybrid ARM loan is one that starts off with a fixed or unchanging interest rate, before switching over to an adjustable rate. For instance, the 5/1 ARM loan carries a fixed rate of interest for the first five years, after which it begins to adjust every one year, or annually. That’s what the 5 and the 1 signify in the name.

As you might imagine, both of these types of mortgages have certain pros and cons associated with them. Use the link above for a side-by-side comparison of these pros and cons. Here they are in a nutshell: The ARM loan starts off with a lower rate than the fixed type of loan, but it has the uncertainty of adjustments later on. With an adjustable mortgage product, the rate and monthly payments can rise over time. The primary benefit of a fixed loan is that the rate and monthly payments never change. But you will pay for that stability through higher interest charges, when compared to the initial rate of an ARM.

Option 2: Government-Insured vs. Conventional Loans

So you’ll have to choose between a fixed and adjustable-rate type of mortgage, as explained in the previous section. But there are other choices as well. You’ll also have to decide whether you want to use a government-insured home loan (such as FHA or VA), or a conventional regular type of loan. The differences between these two mortgage types are covered below.

A conventional home loan is one that is not insured or guaranteed by the federal government in any way. This distinguishes it from the three government-backed mortgage types explained below (FHA, VA and USDA).

Government-insured home loans include the following:

The Federal Housing Administration (FHA) mortgage insurance program is managed by the Department of Housing and Urban Development (HUD), which is a department of the federal government. FHA loans are available to all types of borrowers, not just first-time buyers. The government insures the lender against losses that might result from borrower default. Advantage: This program allows you to make a down payment as low as 3.5% of the purchase price. Disadvantage: You’ll have to pay for mortgage insurance, which will increase the size of your monthly payments.

The U.S. Department of Veterans Affairs (VA) offers a loan program to military service members and their families. Similar to the FHA program, these types of mortgages are guaranteed by the federal government. This means the VA will reimburse the lender for any losses that may result from borrower default. The primary advantage of this program (and it’s a big one) is that borrowers can receive 100% financing for the purchase of a home. That means no down payment whatsoever.

USDA / RHS Loans

The United States Department of Agriculture (USDA) offers a loan program for rural borrowers who meet certain income requirements. The program is managed by the Rural Housing Service (RHS), which is part of the Department of Agriculture. This type of mortgage loan is offered to rural residents who have a steady, low or modest income, and yet are unable to obtain adequate housing through conventional financing. Income must be no higher than 115% of the adjusted area median income [AMI]. The AMI varies by county. See the link below for details.

Combining: It’s important to note that borrowers can combine the types of mortgage types explained above. For example, you might choose an FHA loan with a fixed interest rate, or a conventional home loan with an adjustable rate (ARM).

Option 3: Jumbo vs. Conforming Loan

There is another distinction that needs to be made, and it’s based on the size of the loan. Depending on the amount you are trying to borrow, you might fall into either the jumbo or conforming category. Here’s the difference between these two mortgage types.

  • A conforming loan is one that meets the underwriting guidelines of Fannie Mae or Freddie Mac, particularly where size is concerned. Fannie and Freddie are the two government-controlled corporations that purchase and sell mortgage-backed securities (MBS). Simply put, they buy loans from the lenders who generate them, and then sell them to investors via Wall Street. A conforming loan falls within their maximum size limits, and otherwise conforms to pre-established criteria.
  • A jumbo loan, on the other hand, exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. This type of mortgage represents a higher risk for the lender, mainly due to its size. As a result, jumbo borrowers typically must have excellent credit and larger down payments, when compared to conforming loans. Interest rates are generally higher with the jumbo products, as well.

This page explains the different types of mortgage loans available in 2017. But it only provides a brief overview of each type. Follow the hyperlinks provided above to learn more about each option. We also encourage you to continue your research beyond this website. Education is the key to making smart decisions, as a home buyer or mortgage shopper.


Buy-to-let mortgages with HSBC Expat – Types of rate – HSBC Expat, types of mortgages.#Types


Buy-to-let mortgages with HSBC Expat – Types of rate

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To use online banking you need to allow this website to use cookies. This setting is usually found in your browser’s privacy or security settings. If you have cookies disabled you will still be able to use the HSBC Expat website but online banking will not be available and some other features may not work as expected.

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  • Buy to let mortgages

    Buy to Let rates

    HSBC are not able to provide mortgages to residents of all countries. Subject to confirmation that you meet the applicable eligibility criteria and depending upon your country of residence, individual circumstances and your requirements buy to let mortgages may be provided by either HSBC Expat or HSBC Bank plc, based in the UK.

    Choose between tracker or fixed interest rates

    HSBC Expat and HSBC Bank plc, in the UK, offer tracker interest rates. HSBC Bank plc, in the UK, also offer fixed interest rates. Before you proceed with a mortgage you should make sure you can afford the monthly payments.

    Tracker interest rate

    Available from HSBC Expat

    The tracker mortgage interest rate is set at an agreed percentage above the Bank of England base rate. The monthly payments rise and fall (track) in line with changes to the base rate.

    • No early repayment charge
    • Make unlimited overpayments
    • Make lump sum reductions
    • Repay your loan at any time

    The following tracker mortgage interest rates are available from HSBC Expat Only:

    The Bank of England Base Rate is set by the Bank of England. HSBC Tracker mortgage interest rates are linked with a margin above this Base Rate.

    This is the percentage rate at which the lender calculates the interest that is charged the borrower on a mortgage.

    APR stands for the Annual Percentage Rate of charge used to compare loan offers.

    The period during which the fixed or tracker rate applies. Following the expiry of the fixed rate period, the mortgage rate will revert to the HSBC buy to let mortgage variable rate.

    A fee charged on some mortgages to secure a particular mortgage deal and/or to cover administration costs.

    The fee charged for the administration involved in arranging the loan.

    The maximum amount that can be borrowed with this product.

    For information on the tracker mortgage interest rates available from HSBC Bank plc, in the UK visit:

    Fixed interest rate

    Available from HSBC Bank plc, in the UK, only.

    A fixed rate mortgage provides the security of fixed mortgage payments until an agreed date, no matter what happens to interest rates. HSBC Bank plc, in the UK fixed rate mortgages revert to the HSBC variable rate at the end of the fixed rate period.

    An Early Repayment Charge applies if you increase your standard monthly payment by more than 20% or you repay (by any other method) all or part of your mortgage, over and above your standard monthly payment, during a fixed rate period.

    For information on the fixed mortgage interest rates available from HSBC Bank plc, in the UK visit:

    Understanding fees

    A number of different fees are chargeable for different types of mortgages. The table below explains some of the fees involved and provides amounts where possible.

    A non refundable fee charged on some mortgages to secure a particular mortgage deal and/or to cover administration costs.

    The fee charged for the administration involved in arranging the loan.

    The fee charged by a lender who, with the customer’s written consent, requests details from their existing mortgage lender.

    A Completion fee is a fee the lender charges to cover the cost of electronically transferring the mortgage funds to the borrower.

    Also referred to as a professional valuation, a Standard Valuation Fee is a fee to cover the basic valuation of a property conducted on behalf of a mortgage lender to enable them to assess the security offered by the property for the proposed mortgage.

    An exit fee is a fee charged by many institutions when you fully repay your mortgage. HSBC Bank do not charge an exit fee.

    Standard Valutation fee scale

    The current fee, including VAT (UK only), for HSBC Expat, Buy to Let property valuations is detailed below. Fees are subject to change, therefore, please refer to your Key Facts Illustration for details of the fees payable by you. The valuation fee quoted includes a 35 non-refundable administration fee. Please note this fee scale is not applicable to properties in the Channel Islands and Isle of Man. For such properties please refer to your local HSBC Bank plc, in the UK branch.


    Mortgage Advice That You Can Trust – Mortgages-OnlineMortgages-Online, Mortgage Advice and Arranging, types of mortgages.#Types


    Mortgage Advice That You Can Trust

    Mortgages-Online are a team of mortgage advisers providing mortgage advice NATIONWIDE by remote means. Mortgage advice is delivered via the Internet, telephone and sometimes face to face. We have a wealth of experience having provided online mortgage advice since 1997.

    A professional mortgage broker is likely to save you money when a arranging your mortgage. Unlike a lender that can only offer a limited range of mortgages, Mortgages-Online can choose from thousands of mortgages from many lenders. With such a vast choice of mortgage products you can be confident of finding the best mortgage.

    It can be time consuming if you have to provide information to more than one lender. Once we understand your needs Mortgages-Online will eliminate lenders that cannot help, determine which lender is the most suitable and then make an application on your behalf. It s all rather painless and we can apply this principle the next time you apply for a mortgage, saving you time both now and in the future.

    What next?

    Either telephone and speak directly with a mortgage adviser or complete an enquiry form and we will contact you.

    Our initial consultation is FREE and we will be able to tell you immediately whether or not we can help. If we can help then we will need to gather some fairly detailed information; this is something that every lender and mortgage broker must do.

    We can start the mortgage application process either before or after you have found a property. Throughout the process we will liaise with the lender and any third parties to keep you updated.

    We can also help you with life assurance, buildings and contents and finding a solicitor if you do not have one in mind. We offer a one stop shop for friendly, unbiased mortgage advice that you can trust.

    YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

    Mortgages-Online is authorised and regulated by the Financial Conduct Authority, No. 442328. Some of our services may not be regulated by the Financial Conduct Authority.

    Initial consultation is free. If you decide to proceed with our service then a fee may be charged for our advice. See Charges.

    We can recommend mortgages from the whole of market.

    Your details remain confidential and are not shared with third parties except solely for the purpose of arranging a mortgage and related products that you purchase through us.


    Types of mortgages, types of mortgages.#Types #of #mortgages


    Types of mortgages

    Get a low interest rate guaranteed for 5 years, predictable fixed payments, and the flexibility to prepay annually a portion of your mortgage ahead of time.

    • Choose terms of 6 months to 10 years
    • Enjoy a lower interest rate and predictable payments
    • Prepay or increase payment amounts by up to 20% once per mortgage year
    • Cash back option available*
    • Learn more
    • Apply now
    • Choose an open- or fixed-term mortgage of 5 years
    • Benefit from a lower interest rate and predictable payments
    • Choose an amortization of up to 30 years
    • Convert to a fixed-term mortgage any time
    • Learn more
    • Apply now
    • Share the deposit, mortgage, and other costs with one or more co-owners
    • Get flexible payment options, portability, assumability, and competitive rates
    • Gain peace of mind knowing each owner is covered by life insurance
    • Learn more
    • Look into home equity loans and other options
    • Consider a lower-interest Bright Ideas loan for energy-saving renovations
    • Learn more
    • Look into a range of environmental financing options, including the Bright Ideas home renovation loan
    • Save money on your CMHC high-ratio mortgage insurance
    • Take advantage of rebates and incentives from BC Hydro, FortisBC, and more
    • Learn more
    • Apply now

    *Take out a 3, 4, 5, 7 or 10-year fixed-term mortgage, and we will give you cash back in an amount of up to 5% of the mortgage principal, or up to 2% of the mortgage principal for laneway mortgages transferred from another institution. Cash back is paid on the date the mortgage is funded. If the mortgage is not funded, no cash back will be paid. If you choose to break your mortgage commitment for any reason prior to maturity, you will be required to repay a portion of the cash back received.


    What Types Of Mortgages Can I Get, Experian, mortgage types.#Mortgage #types


    Types of mortgages

    Mortgage types

    Also in this section.

    There are a variety of mortgages out there, to suit people with different preferences and financial circumstances. Types of mortgages include:

    These mortgages are aimed at people buying their first home and balance the best rates available against income, expenses and credit information.

    Remortgaging involves either taking out a new loan with either a new or existing lender and paying your old mortgage off with it.

    This is where you only pay off the interest on the mortgage each month. Your monthly payment is generally quite a bit less as there is no capital to pay off however you still have to pay off the capital at the end of the term.

    These mortgages are available if you are looking to move house, where you can port your existing mortgage and take any additional borrowing you may need on a new mortgage product or start a new mortgage from scratch.

    These are usually for landlords who already own one property, but buy another property to rent out. Buy to Let mortgages tend to come with higher interest rates and a minimum deposit of around 25% of the property’s value although a number of lenders will accept a lower, 20% deposit.

    Typically allow first-time or existing buyers without a large deposit to get onto, or move up, the housing ladder, with help from the government. This could help them access lower deposit mortgages.

    Fixed, tracker or variable?

    Mortgages are available on a fixed or variable rate of interest.

    Where your interest rate is fixed for a set period of time. The main advantage is you know exactly what you will be paying each month, but the flipside is that you will not benefit from falling interest rates.

    This is where you mortgage tracks a pre-arranged independently set interest rate i.e. the Bank of England base rate for an agreed period.

    Here, the interest rate on your mortgage is set by your bank or building society and it is subject to change at your lender’s discretion.

    CreditMatcher helps you compare first time buyer, home mover and re-mortgage deals on fixed rate or variable rate terms.

    Compare mortgages with Experian CreditMatcher

    Experian is a credit broker and not a lender

    • Find different mortgages including existing home owner, first time buyer and remortgage deals
    • Free to use – just give us a few details to start
    • Compare mortgages deals without affecting your score

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    Experian acts as a credit broker and not a lender in the provision of its credit cards and personal, car finance and guarantor loans matching services, meaning it will show you products offered by lenders and other brokers.

    Experian acts independently and although CreditMatcher shows products for a range of lenders and other brokers it does not cover the whole of the market, meaning other products may be available to you. CreditMatcher services are provided free however we will receive commission payments from lenders or brokers we introduce you to. For information about the commission we receive from brokers for mortgages and secured loans click here.

    CreditMatcher is provided by Experian Ltd (Registered number 653331). Experian Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 738097). Experian Ltd is registered in England and Wales with registered office at The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ.

    Copyright 2017, Experian Ltd. All rights reserved.

    Mortgage types


    Buy-to-let mortgages with HSBC Expat – Types of rate – HSBC Expat, types of mortgages.#Types


    Buy-to-let mortgages with HSBC Expat – Types of rate

    Please enable cookies

    To use online banking you need to allow this website to use cookies. This setting is usually found in your browser’s privacy or security settings. If you have cookies disabled you will still be able to use the HSBC Expat website but online banking will not be available and some other features may not work as expected.

    Types of mortgages

    • Why HSBC Expat

    How you can benefit

    Types of mortgages

    • Online Banking
    • Mobile Banking
    • International offices
    • Contact us 24/7
    • Types of mortgages
    • Your guide to buying to let in the UK Download now
  • Solutions for your future

    Guides and tools for expats

    • Planning to move abroad
    • Just arrived in a new country
    • Experienced expat
    • Moving back home
    • Expat life is.
    • Types of mortgages
    • A Different Perspective: Expat life Watch the video
  • Buy to let mortgages

    Buy to Let rates

    HSBC are not able to provide mortgages to residents of all countries. Subject to confirmation that you meet the applicable eligibility criteria and depending upon your country of residence, individual circumstances and your requirements buy to let mortgages may be provided by either HSBC Expat or HSBC Bank plc, based in the UK.

    Choose between tracker or fixed interest rates

    HSBC Expat and HSBC Bank plc, in the UK, offer tracker interest rates. HSBC Bank plc, in the UK, also offer fixed interest rates. Before you proceed with a mortgage you should make sure you can afford the monthly payments.

    Tracker interest rate

    Available from HSBC Expat

    The tracker mortgage interest rate is set at an agreed percentage above the Bank of England base rate. The monthly payments rise and fall (track) in line with changes to the base rate.

    • No early repayment charge
    • Make unlimited overpayments
    • Make lump sum reductions
    • Repay your loan at any time

    The following tracker mortgage interest rates are available from HSBC Expat Only:

    The Bank of England Base Rate is set by the Bank of England. HSBC Tracker mortgage interest rates are linked with a margin above this Base Rate.

    This is the percentage rate at which the lender calculates the interest that is charged the borrower on a mortgage.

    APR stands for the Annual Percentage Rate of charge used to compare loan offers.

    The period during which the fixed or tracker rate applies. Following the expiry of the fixed rate period, the mortgage rate will revert to the HSBC buy to let mortgage variable rate.

    A fee charged on some mortgages to secure a particular mortgage deal and/or to cover administration costs.

    The fee charged for the administration involved in arranging the loan.

    The maximum amount that can be borrowed with this product.

    For information on the tracker mortgage interest rates available from HSBC Bank plc, in the UK visit:

    Fixed interest rate

    Available from HSBC Bank plc, in the UK, only.

    A fixed rate mortgage provides the security of fixed mortgage payments until an agreed date, no matter what happens to interest rates. HSBC Bank plc, in the UK fixed rate mortgages revert to the HSBC variable rate at the end of the fixed rate period.

    An Early Repayment Charge applies if you increase your standard monthly payment by more than 20% or you repay (by any other method) all or part of your mortgage, over and above your standard monthly payment, during a fixed rate period.

    For information on the fixed mortgage interest rates available from HSBC Bank plc, in the UK visit:

    Understanding fees

    A number of different fees are chargeable for different types of mortgages. The table below explains some of the fees involved and provides amounts where possible.

    A non refundable fee charged on some mortgages to secure a particular mortgage deal and/or to cover administration costs.

    The fee charged for the administration involved in arranging the loan.

    The fee charged by a lender who, with the customer’s written consent, requests details from their existing mortgage lender.

    A Completion fee is a fee the lender charges to cover the cost of electronically transferring the mortgage funds to the borrower.

    Also referred to as a professional valuation, a Standard Valuation Fee is a fee to cover the basic valuation of a property conducted on behalf of a mortgage lender to enable them to assess the security offered by the property for the proposed mortgage.

    An exit fee is a fee charged by many institutions when you fully repay your mortgage. HSBC Bank do not charge an exit fee.

    Standard Valutation fee scale

    The current fee, including VAT (UK only), for HSBC Expat, Buy to Let property valuations is detailed below. Fees are subject to change, therefore, please refer to your Key Facts Illustration for details of the fees payable by you. The valuation fee quoted includes a 35 non-refundable administration fee. Please note this fee scale is not applicable to properties in the Channel Islands and Isle of Man. For such properties please refer to your local HSBC Bank plc, in the UK branch.


    Types of Mortgage Loans, KeyBank, types of mortgages.#Types #of #mortgages


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    Types of mortgages

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    Which of our mortgages is right for you?

    Conventional Fixed Rate Mortgage

    You plan to stay in your home for more than a few years.

    Rate remains the same for the term of the loan.

    Allows for easier budgeting.

    Conventional Adjustable Rate Mortgage

    You may want to sell or refinance early and can afford to make larger monthly payments should interest rates rise.

    Interest rate adjusts periodically to reflect market condition within a predetermined time frame, and there may not be a cap on interest rate increases.

    Lower initial rate can be locked in for different time periods, after which the interest rate and monthly payments may change.

    Government (FHA/VA/HomeReady ® )

    You qualify based on income and other factors.

    You qualify for a VA home loan as a veteran or reservist.

    FHA loans offer low down payment options and the ability to use gift funds for down payment and closing costs.

    VA loans are partially guaranteed by the VA, so private lenders can provide better terms like 100% loan-to-value without mortgage insurance and no down payment in most cases.*

    Jumbo Loan

    You are in the market for a higher priced home.

    Loan amounts up to $3.5 million with fixed- and adjustable-rate options.

    SilverKey available for single family attached and detached, condos and Planned Unit Developments (PUDs).

    GoldKey exclusive to Key Private Bank clients and for up to 90% LTV to $1 million with no PMI required.

    Combination

    You have funds for a 10% down payment.

    You’ll have 2 simultaneous mortgages, one for 80% of the home’s value (LTV) and one for 10% LTV. The remaining 10% is your down payment.

    Eliminates the need for Private Mortgage Insurance (PMI)

    Community Professional

    You qualify based on income, location or profession.

    Community loans may offer low down payments.

    Professional loans are tailored to financial realities of doctors and dentists.

    State Bond

    You are qualified as a first time home buyer in the state.

    Various programs with features including competitive rates.

    We’re in your neighborhood!

    Have all your questions answered by an experienced mortgage loan officer near you.

    Mon-Fri 8 a.m.- 8 p.m. EST

    *Unless required by the lender, or if the purchase price exceeds the reasonable value of the property as determined by VA, or the loan is made with graduated payment features

    NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. Information and offer are subject to change without notice. All loans are subject to credit and collateral approval.


    Types of mortgages, types of mortgages.#Types #of #mortgages


    Types of mortgages

    Get a low interest rate guaranteed for 5 years, predictable fixed payments, and the flexibility to prepay annually a portion of your mortgage ahead of time.

    • Choose terms of 6 months to 10 years
    • Enjoy a lower interest rate and predictable payments
    • Prepay or increase payment amounts by up to 20% once per mortgage year
    • Cash back option available*
    • Learn more
    • Apply now
    • Choose an open- or fixed-term mortgage of 5 years
    • Benefit from a lower interest rate and predictable payments
    • Choose an amortization of up to 30 years
    • Convert to a fixed-term mortgage any time
    • Learn more
    • Apply now
    • Share the deposit, mortgage, and other costs with one or more co-owners
    • Get flexible payment options, portability, assumability, and competitive rates
    • Gain peace of mind knowing each owner is covered by life insurance
    • Learn more
    • Look into home equity loans and other options
    • Consider a lower-interest Bright Ideas loan for energy-saving renovations
    • Learn more
    • Look into a range of environmental financing options, including the Bright Ideas home renovation loan
    • Save money on your CMHC high-ratio mortgage insurance
    • Take advantage of rebates and incentives from BC Hydro, FortisBC, and more
    • Learn more
    • Apply now

    *Take out a 3, 4, 5, 7 or 10-year fixed-term mortgage, and we will give you cash back in an amount of up to 5% of the mortgage principal, or up to 2% of the mortgage principal for laneway mortgages transferred from another institution. Cash back is paid on the date the mortgage is funded. If the mortgage is not funded, no cash back will be paid. If you choose to break your mortgage commitment for any reason prior to maturity, you will be required to repay a portion of the cash back received.


    Types of Mortgage Lenders #mortgage #claculator


    #direct mortgage lenders

    #

    Types of Mortgage Lenders

    Mortgage bankers are essentially mortgage lenders that originate and sell their loans in pools on the secondary market to investors such as Freddie Mac and Fannie Mae, along with private investors. If they are non-depository institutions, they finance the loans with warehouse lines of credit extended by other lenders, but quickly sell them off on the secondary market so they can originate new loans. Countrywide and Wells Fargo Home Mortgage are two are the largest examples, though much smaller operations also share this distinction.

    Portfolio Mortgage Lenders

    Portfolio mortgage lenders originate and fund their own loans, and may service them for the entire life of the loan. Because they typically offer deposit accounts to consumers, they are able to hold onto the loans they fund. They are also able to offer more flexibility in loan products and loan programs because they don t need to adhere to the guidelines of secondary market buyers. That means unique program guidelines and special offerings that other banks can t offer. Once their loans are serviced and paid for on time for at least a year, they are considered seasoned and can be sold on the secondary market more easily. Countrywide and Washington Mutual are examples of portfolio mortgage lenders.

    Correspondent Mortgage Lenders

    Correspondent mortgage lenders originate and fund loans in their own name, then sell them off to larger mortgage lenders, who in turn service them, or sell them on the secondary market. The loans can be underwritten by the correspondent mortgage lenders, but the loan programs are usually based on terms approved by the larger mortgage lender, or sponsor . Correspondents usually have a array of products from different sponsors, and act as an extension for those larger lenders. In other words, a small correspondent mortgage lender may resell Wells Fargo products and/or Countrywide products under their own name.

    Direct Mortgage Lenders

    A direct mortgage lender is simply a bank or lender that works directly with a homeowner, with no need for a middleman or broker. Mortgage bankers and portfolio lenders usually fall under this category if they have retail operations. Examples include Washington Mutual, Wells Fargo and Bank of America, though smaller entities could share this distinction as well.

    Wholesale Mortgage Lenders

    Wholesale mortgage lenders are similar to mortgage bankers in that they originate and service loans, and sell them on the secondary market. Most mortgage bankers have wholesale and retail divisions, although wholesale lenders can be independent entities as well.

    A wholesale mortgage lender works with independent mortgage brokers and loan officers to originate loans. Brokers and loan officers work on the retail end with borrowers, and once they secure a deal, they send that deal to a wholesale mortgage lender for underwriting and processing. The wholesale mortgage lender will fund the loan, and usually sell it on the secondary market within a month or two.

    Warehouse lenders provide financing to other mortgage lenders so they can originate their own mortgages. This short-term funding provides smaller lenders with liquidity so they can focus on making more mortgages while selling existing ones on the secondary market.

    Smaller mortgage bankers and correspondent lenders rely on warehouse lines of credit to finance their operations. They pay back the warehouse lines of credit whens loans are sold, and may give a cut to the warehouse lender for each loan that is eventually sold. The mortgages are used as collateral for the temporary financing.

    Subprime Mortgage Lenders

    Subprime lenders tend to focus on homeowners with less than stellar credit. While the definition of subprime varies from lender to lender, most in the industry characterize it as lending to borrowers with credit scores below 620. But other issues may persist, including limited income and assets, or inability to provide documentation. As a result, interest rates provided by subprime mortgage lenders will be much higher than those at standard lenders. Essentially, subprime lenders are willing to take on more risk for a greater reward (a sky-high interest rate).

    Alt-A Mortgage Lenders

    Alt-A mortgage lenders typically offer mortgages to borrowers with limited documentation, limited or no down payment. and/or credit scores mostly between 620-720. This type of mortgage lender falls somewhere between a prime lender and a subprime lender. Borrowers may use an Alt-A mortgage lender because they have a tricky loan scenario or a sticking point that makes it difficult or impossible to close with a traditional mortgage lender. The risk appetite of an Alt-A lender is medium-high.

    Mortgage brokers work independently with both banks/mortgage lenders and borrowers, and need to be licensed. Their job is to contact borrowers and bring in potential deals. Once they have a deal, they can send it to a mortgage bank or a wholesale lender. They need to process the loan once it is approved, and can negotiate pricing with the bank or mortgage lender to receive a rebate, known as a yield spread premium. Mortgage brokers may form partnerships with real estate agents to ensure a steady stream of new business.

    Loan officers work under mortgage brokers, and basically do the same thing a broker would do, except they don t need to be licensed. They solicit borrowers using direct mail, telemarketing, and similar practices. Brokers usually provide them with office supplies and leads, and each take a split of the total commission. They don t need any experience, so take caution if and when one solicits you.

    Related: Take a look at the top mortgage lenders in the second quarter of 2010.


    Types of mortgage loans – Chase Mortgage #mortgage #lead #generation


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    Choosing a type of mortgage

    With a fixed–rate mortgage, you’ll always know what your monthly principal and interest payments will be. You can also lower your monthly payments by spreading them out over a long period of time.

    Your interest rate is guaranteed to remain fixed for the length of the loan. You can choose a 10–, 15–, 20–, 25– or 30–year term. Low down payment options are available.

    Adjustable–Rate Mortgage (ARM)

    ARMs offer lower early payments than a fixed–rate mortgage. If you’re planning on owning your home for a short period of time, an ARM may be a good option.

    Your interest rate is fixed for 5, 7 or 10 years (based on the chosen product), and becomes variable for the remaining loan term, adjusting every year thereafter. For example, a 5/1 ARM would have a fixed interest rate for the first five years and then convert to an adjustable rate, with annual adjustments for the remaining term of the loan. You can choose a 5/1, 7/1 or 10/1 ARMs with a 30–year term.

    Jumbo Mortgages are available for loan amounts generally greater than $417,000 up to $3 million.

    These fixed–rate and ARM loans are available for up to 30–year terms and amounts greater than conventional limits. You can choose a jumbo fixed (15–, 20– and 30–year terms available) or a jumbo ARM (5/1, 7/1 and 10/1 with a 30–year term).

    DreaMaker Mortgage

    If you meet the required income limits, you may be able to take advantage of Chase’s DreaMaker mortgages. They require only 5% for a down payment (all of which can come from an eligible gift or grant), flexible funding options for closing costs, reduced mortgage insurance requirements and lower monthly payments compared to other options.

    These fixed–rate loans are available for up to 30–year terms and are used to purchase a 1– to 4–unit primary residence. You can finance up to 95% on 1–unit residences and get a term up to 30 years.

    FHA mortgages offer down payments as low as 3.5%, which can include the use of gift funds.

    An FHA Mortgage is a loan insured by the government. It can be used to buy or refinance 1– to 4–unit properties. You can choose a fixed 10–, 15–, 20–, 25– or 30–year term.

    Home Affordable Refinance Program (HARP)

    Created by the federal government, HARP makes it easier for eligible homeowners to refinance their homes to a lower mortgage rate. You can refinance even if you owe more than your home is worth. You may not need to provide as much documentation, and the approval time may be faster than a traditional refinance.

    This program is available for eligible homeowners with fixed-rate or adjustable–rate mortgages.
    Learn more

    Veterans Affairs (VA)

    VA loans have little or no down payment requirements, no monthly mortgage insurance and provide up to 100% financing.

    You can get a fixed-rate term of 10, 15, 20, 25 or 30 years. Learn more about VA benefits or call 1-800-827-1000.

    A 5% down payment on a 30-year, fixed-rate mortgage with a loan amount of $200,000 and APR of 4.625% would require 360 monthly payments of $1,151. This payment example includes mortgage insurance.

    For adjustable-rate mortgage (ARM) products, interest is fixed for a set period of time, and adjusts periodically thereafter. At the end of the fixed-rate period, the interest and payments may increase. The APR may increase after the loan consummation.

    For down payments less than 20% on conventional loans, private mortgage insurance (PMI) is required and PMI charges apply.

    All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. DreaMaker ® is a registered trademark of JPMorgan Chase Co.

    Tools and calculators are provided as a courtesy to help you estimate your mortgage needs. Results shown are estimates only. Speak with a Chase Mortgage Banker for more specific information. Message and data rates may apply from your service provider.

    Home lending products offered by JPMorgan Chase Bank, N.A.