DICK VITI, BROKER

AMERICA'S REAL ESTATE ASSOCIATES, INC. (AREA)

Woodstock - Cherokee County - Georgia - Residential and Commercial Real Estate
 
   
 

Conventional Loan Information

A conventional loan is simply a loan offered by a traditional private lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they often require less paperwork and typically do not have a maximum allowable amount.

Amortized versus Non-Amortized Loans
Amortized loans differ from other types of loans because of the way the the amount and structure of each payment is determined. Typically, in amortized loans, the borrower makes regular scheduled payments.
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Fixed Rate versus Variable Rate Loan
As the name implies, a fixed-rate mortgage carries the same interest rate for the life of the loan. Traditionally, fixed-rate mortgages have been the most popular choice among homeowners, because the fixed monthly payment is easy to plan and budget for, and can help protect against inflation. Fixed-rate mortgages are most common in 30-year and 15-year terms, but recently more lenders have begun offering 20-year and 40-year loans.

Adjustable-rate mortgages differ from fixed-rate mortgages in that the interest rate and monthly payment can change over the life of the loan. This is because the interest rate for an ARM is tied to an index (such as Treasury Securities) that may rise or fall over time. In order to protect against dramatic increases in the rate, ARM loans usually have caps that limit the rate from rising above a certain amount between adjustments (i.e. no more than 2 percent a year), as well as a ceiling on how much the rate can go up during the life of the loan (i.e. no more than 6 percent). With these protections and low introductory rates, ARM loans have become the most widely accepted alternative to fixed-rate mortgages.

Private Mortgage Insurance.
In most cases when a homebuyer's down payment is less then 20% of the appraised value of the price of the property, it is necessary that the buyer obtain private mortgage insurance. Better known as PMI, private mortgage insurance enables buyers to obtain mortgages with lower down payments because the lender is insured against any default on the loan.

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FHA Mortgage Information
A FHA loan is a popular mortgage loan insured by the Federal Housing Administration. FHA Loans are issued by federally qualified lenders nation wide, and are widely used by low Income Americans to pay for housing they otherwise could not afford. FHA loans are commonly used by prospective homeowners who cannot afford sufficient down payments.

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VA Mortgage Information
A VA loan is a mortgage loan guaranteed by the Veterans Administration. VA Loans are dispensed by federally qualified lenders nationwide.

The VA loan program was created specifically to offer long term homeowner financing for America's war veterans and their surviving spouses. Retired American military personnel continue to benefit from the VA loan as it offers them 100% financing without private mortgage insurance.

General Rules for Eligibility
One of the obligatory requirements for VA loan eligibility, veterans must have completed at least 90 days on active duty and been discharged under other than dishonorable conditions. For a comprehensive list of rules governing eligibility, please visit the Department of Veterans Affairs website.

DD 214 Form
The most important document required by VA lenders is an applicants' DD 214 Form - also known as a "Certificate of Honorable Discharge". Veterans may be able to re-obtain their certificate by contacting their County Veterans Service Officer it, or request it on the Department of Veterans Affairs website.


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