Types of residential mortgages
We can arrange residential mortgages for the purchase or refinance of 1-4 family, owner-occupied and investment residential properties.
Residential mortgages are also available for new construction or renovation of existing a 1-4 family residential property.
Mortgages involving construction usually allow for an initial period of about 12 months to complete the work. During the construction phase, monthly payments are calculated as interest only based on the amount of funds that have been issued. When the property is complete and a Certificate of Occupancy is issued, most construction loans will convert to a fully amortized loan payment schedule.
Self employed borrowers
Income verification for the self employed borrower is our specialty. We begin by reviewing the last two years of personal and business tax returns and extract the income or cash flow that can be used for repayment of the mortgage. At First Hudson Mortgage, we have the underwriting knowledge and experience to address the unique financing challenges that can be presented by the self employed borrower.
The loan limit for Conventional Residential Mortgages is $424,100, as set by Fannie Mae (FMNA) and Freddie Mac (FHLMC).
A loan amount over $424,100 is considered a “Jumbo Mortgage” and is subject to slightly different interest rates and underwriting guidelines.
Loan amounts over the FHLMC/FHMA limit of $424,100, are considered jumbo loans. Interest rate and many standard underwriting guidelines applied to conventional conforming loans, will be modified for the jumbo loan application. Jumbo loans need be originated and underwritten in accordance with the specific requirements of the investor / lender that will ultimately fund the jumbo loan.
Conventional residential mortgages are available with either fixed or adjustable rates and a variety of loan terms. Fixed rates are usually locked at application and remain the same for the life of the loan. Adjustable rates typically offer an initial below market interest rate that will adjust up or down, with the corresponding index and margins. Typically, the shorter the term of the loan, the lower the interest rate will be.
Interest rates vary from lender to lender and are influenced by credit, equity, property type and loan terms. The 30 year fixed-rate mortgage is considered the gold standard of conventional residential mortgages. The interest rate does not change and payments are spread out over the 30 year term, allowing for the lowest required monthly payment.
Historically, buyers needed a cash down payment of 20% of the purchase price when buying a property. However, as property values have increased, most buyers do not have a 20% down payment. Today, loan features such as mortgage insurance can be utilized to arrange competitive and affordable mortgages with small or no down payment. FHA, USDA and VA loan programs offer mortgages with a government guarantee form of mortgage insurance. The cost of mortgage insurance will vary depending on the program and, if necessary, the cost of mortgage insurance can be financed as part of the mortgage.
The loan balance can be prepaid in part of in full at any time through out the loan process. Prepayments made to the principle balance will lower the total amount of interest paid over the life of the loan and shorten the term of the loan. The required monthly payment will not change when you prepay a fixed rate loan, unless the loan is being refinanced.
Government-insured loan programs
Lenders provide the funds and a government entity provides the insurance for FHA, USDA, VA and Reverse Mortgage loan programs. The Borrower pays the Insurance premium.
Government-insured loan programs are intended to assist borrower by offering lending solutions and allowing exceptions for borrowers that may not meet conventional underwriting guideline. However, careful examination of the program details, costs and features is recommended before choosing a government insured loan.
First Hudson Mortgage can arrange *Reverse Mortgages, FHA, USDA and VA loans for qualified borrowers.
* Reverse Mortgages offer borrowers over 62 years of age, the opportunity to convert equity in their home to cash with out having to make monthy payment, while still enables them to retain ownership of thier home.