Loan Programs

A Fixed-Rate Mortgage applies the same interest rate toward monthly loan payments for the life of the loan. Fixed-rate mortgages generally have higher interest rates than ARMs because there is more risk for the lender. For example, a lender can offer a 30-year fixed loan to a homebuyer at a 6% interest rate. The loan will remain at the 6.0% interest rate, even if the market rate rises to 8%. Fixed-Rate Mortgage benefits include:

• No change in monthly principal and interest payments regardless of fluctuations in interest rates.
• More stability may give you "peace-of-mind".

Adjustable Rate Mortgage (ARM) applies an adjustable interest rate toward monthly loan payments. The homebuyer's principal and interest payment will adjust periodically based on fluctuations in the interest rate. For example, a lender could offer a 30-year ARM loan to a homebuyer at an initial 6% interest rate. During an adjustment period for the ARM loan, the market interest rate could rise to 8.0%, resulting in a significantly larger interest payment. Similarly, the market interest rate could decrease to 5.0%, resulting in lower interest payments.

• Initial payments are lower than fixed rate mortgages.
• Easier qualification for higher loan amounts because of lower initial interest rates.
• Interest rate caps limit the maximum interest payment allowed for the loan.
• Lower interest payments if the interest rate drops over time.

The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low down payments, which typically run around 3 percent, and have relatively easy requirements. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcies do not necessarily disqualify borrowers from using this program! In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance!

Is the 203k loan a good idea to purchase a bank foreclosure in Baltimore, Maryland?

Most (Real Estate Owned, Bank Owned) houses are run down. That is why banks sell them so cheap.

The problem is that financed buyers can't buy houses with holes in the walls, broken windows, missing bathrooms, filthy carpets, etc. Or buyers don't usually have the money to pay for repairs out of pocket.

So what is the solution? The FHA 203k. The 203k loan allows you to borrower the money you will need to purchase your new home, renovate it and finance up to 6 months worth of mortgage payments while your work is being completed if necessary. Also being one of the few loan products that allow a minimal down payment of 3.5%, with fixed interest rates and conservative terms.

 So where is the draw back? Up to this point the 203k has not been a very popular loan because of the lack of need in the market place. It is really important to align yourself with a real estate agent and lender that specialize in 203k financing in Baltimore, Maryland.

In short if you are buying a fixer upper there are few options for financing in Maryland. Understanding that there is a product that can take care of your home buying needs is another.  Call us today.  We love 203K financing!!!