Understanding Your Loan Options
Understanding your loan options
Union Home Plus™ makes home buying easier with our full suite of conventional and government insured loan options. As an established and experienced lender, our team helps you take the necessary steps to choose the right mortgage and move into your dream home. These loan options allow you to put little or no money into a down payment, making home ownership a reality sooner rather than later.
KEY BENEFITS of FHA loans
An FHA-insured mortgage is currently one of the best mortgages available. Here are some of its key advantages over conventional loans: Easier down payment and credit score requirements. The requirements for FHA loans are much lower than conventional loans. You can qualify with a credit score of at least 580 and a down payment of just 3.5% of the final loan amount.
Low interest rates. With the government’s backing, FHA mortgage rates are lower than most traditional mortgage rates. In some cases, an FHA borrower with a credit score of 660 can qualify for the same rate as a conventional borrower would with a credit score of 740.
Better home stability. Some FHA programs are designed to help you keep your home during hard times and prevent foreclosure. It’s highly advised to communicate with professionals to work out problems before the situation gets more difficult to manage. With FHA Loans and our assistance, buying a home has never been easier.
KEY BENEFITS of FHA 203(k) (remodel and construction)
Buying a fixer-upper today and turning it into your dream home later can seem like the perfect plan — but the actual cost to renovate and remodel is sometimes a much harsher reality. Here’s the deal: you’re taking on a lot with this project so at least save yourself some headaches by getting one mortgage to finance the purchase and all that repair work.
This is where an FHA 203k loan program is a perfect fit.
-Use one loan to finance the purchase and home renovation
-You have six months to remodel/repair your house
-Standard FHA guidelines are used to determine eligibility
KEY BENEFITS of VA loans
The VA loan is one of the few programs that lets you finance 100% of the home’s value with $0 down. It also doesn’t require Private Mortgage Insurance (PMI) like conventional loans with less than 20% down, potentially saving you hundreds of dollars!
Here are some other reasons a VA Loan might be an ideal option for you:
– Lower interest rates than those of conventional loans
– Lower minimum credit score required
– Strict limits on closing costs saves you money
– Simplified approval process, designed to cushion common financial challenges affecting veterans and military families.
With these benefits, it’s no surprise that the VA loan program has guaranteed over 20 million loans across the US. If you meet the qualifications, you can enjoy lower closing costs, lower mortgage payments, and the possibility of no down payment!
KEY BENEFITS of ZERO Down Rural Housing (USDA) Loans
Did you know that 97% of Washington State is “Rural”. That distinction basically means geographically outside of urban areas. But if you’re eligible, you can qualify for lower monthly payments and you don’t need money for a down payment. Click here to see a USDA rural map for Washington counties.
– Available as a 30-year option with a fixed rate
– Finance 100% of your home with no down payment requirement
– No mortgage insurance means you have lower monthly payments
– The loan’s income eligibility cap varies by community
KEY BENEFITS of Reverse Mortgages
You’ve worked hard for your home – now let your home work for you by taking advantage of your home equity. Reverse Mortgages, also known as a Home Equity Conversion Mortgage (HECM), gives seniors the ability to use their home’s equity as cash which can provide an improved financial situation by eliminating monthly mortgage payments. This Federally insured loan offers multiple ways to receive the borrower’s funds and gives them the ability to spend the cash as needed. Common uses of Reverse Mortgage income includes paying off debt, assisting with everyday living, covering costly medical bills, home repairs, vacations and more!
With a number of benefits to offer, reverse mortgage programs can be a lifeline for low-income seniors. There are no credit or income requirements, other than your financial ability to pay ongoing property expenses. With this program, the mortgage pays the homeowner. That’s right. The reverse mortgage lender pays you the equity you have in your home.
– Money from a Reverse Mortgage is typically tax-free
– There are multiple ways to receive the borrower’s funds, either as a line of credit, a term payment, a tenure payment or lump sum
– Live in your home with no mortgage payments and have the ability to maintain their property tax and insurance.
– Borrower must be at least 62 year of age.
– Have the financial ability to pay ongoing property expenses including taxes and insurance.
– Occupy the property as your primary residence.
– Own the property outright or have a small mortgage balance.
– Not be delinquent on any Federal debt.
Important note: Before deciding to get a reverse mortgage, talk to a Union Home Plus™ Advisor to consider all the possible risks against the advantages. Traditional reverse mortgages or HECM loans are insured by the Federal Housing Administration (FHA). They require participation in an independent counseling session to ensure that you adequately understand the reverse mortgage program and process, and that it is the best fit for your needs. If you’ve carefully weighed your options and want to learn more, get in touch with us today.
If you’d like to learn more about which options are best for you, connect with a Union Home Plus™ Advisor today. With over 16 years of experience in the mortgage industry, we have an intimate knowledge of which loan options and resources can be leveraged for your personal situation and needs. Reach out to us today and let us help you discover Your Way Home™!
KEY BENEFITS of a Fixed-Rate Loans
30-year Fixed Rate Mortgage
The 30-year fixed rate mortgage is slow and steady. The best thing about it is that you know what you’re paying for every month. With consistent monthly principal and interest payments, it’s an ideal choice if you plan to stay in your home seven years or longer.
There’s not a significant difference between the costs of fixed and adjustable rate loans. In fact, based upon your personal situation and goals, you’ll need to learn which is best for you. Fixed rates can be a better deal over the long term but an ARM may perform better for you over the short term.
15-year Fixed Rate Mortgage
The fifteen-year fixed rate mortgage is comparable to a good workout – work harder, finish sooner, and feel better. That’s what you’ll get if you fulfill all repayments in 15 years; you’ll save on interest payments and a whole lot of time paying for your house. It comes with all the benefits of the 30-year fixed rate mortgage – plus a better interest rate. Not to mention you pay off your home twice as fast.
Although you’ll be paying higher monthly payments, if you have what it takes to commit, a 15-year fixed rate mortgage is definitely a worth-while investment. (There at also 10 year and 20 year terms available). Talk to one of our Union Home Plus™ Advisors to learn which fixed rate option is best for your goals. Find out in minutes if you qualify by getting a free quote today.
Provide the security of knowing that your principal and interest payments will remain consistent throughout the life of your loan.
KEY BENEFITS of an Adjustable Rate Mortgage (ARM)
Here’s how ARMs work: You get an initial fixed start rate for 3, 5 or 7 years before the mortgage adjusts annually, based on a particular index value. You’ll save money upfront because the intro rate is lower than a fixed-rate option and that lowers your monthly payments. When it adjusts after the initial start rate term, you have options: either sell before your rate changes, refinance your mortgage into better terms or do nothing and let it adjust. The rate could be even lower!
– Increases the availability of loan options if you’re looking for a Jumbo Loan
– Get a fixed rate for 3, 5, 7 or 10 years before the mortgage becomes adjustable
– Ideal if you’re planning to sell your home before the low intro rate adjusts upward.
Optimal for home-buyers who plan on owning their homes for a few years. An “ARM”, or “Adjustable Rate Mortgage” has a fluctuating interest rate and the potential for changing payment amounts. In most ARM mortgages, the interest rate on a loan is fixed for a certain number of years and then allowed to fluctuate in sync with current economic factors.
KEY BENEFITS of a Home Equity Loan (HELOC) & 2nd Mortgages
HELOC’s are most often used for home improvements or to consolidate credit card and other high interest rate debt. Home equity lines of credit and home equity loans (2nd Mortgage) are, despite their similar names, two different products. A home equity line of credit acts like a credit card: Homeowners get a certain amount of credit based on their home’s equity and then use that to make purchases, much like they would with a credit card. A home equity loan provides homeowners with a lump sum of cash, based on the amount of equity in their homes. Benefits come with both types of loans.
Low Interest Rates
The biggest benefit of both home equity lines of credit and home equity lump-sum loans is low interest rates. These rates are far lower than the typical interest rates charged by credit card companies. Typical start rates are Prime (4.50% as of Feb.15, 2018) plus a margin generally of 0%-5%.
A home equity line of credit offers homeowners flexibility in how they spend their money. In fact, homeowners never have to draw on their line of credit. Some homeowners use it as a form of financial protection, knowing that they can draw on their home equity line in case of emergencies like roof repairs or car expense. But if emergencies don’t arise, homeowners can simply leave their home equity line of credit untapped. Homeowners must make payments on their home equity lines of credit only when they use it, much like with a typical consumer credit card.
Some homeowners prefer lump-sum home equity loans because of their stability. A home equity loan comes with a fixed interest rate, one that never changes over life of the loan. However, a home equity line of credit comes with variable interest rates that can change depending on the performance of certain financial indexes. Once homeowners take out a home equity loan, the money is theirs. They simply have to make their monthly payments on time to pay it back. However, lenders can cancel a home equity line of credit or reduce its size whenever they want, as long as they provide proper notice to their clients.