A loan that’s right for you.
Helping you make a smart financial choice.
When rates are low, a “plain vanilla” 30year fixed mortgage is the best choice for most people. But not all. When rates are at “historic lows” a 15year fixed mortgage may be the best choice for some people.
Every borrower’s situation is unique, and for every unique borrower there’s a loan that fits that borrower best. That’s why, when we talk to you, we learn about your situation and goals before we suggest loan programs. When we suggest your options, we’ll give you some guidance on why we think a certain program might be best and why. That way, you can make an informed decision about which loan is best for you.
Fixed Rate Mortgages
Purchase or Refinance
30, 25, 20, 15, or 10 Year Fixed
A fixed rate mortgage makes sense if you’re planning to stay in your home for at least 5 years, or you are risk-averse and don’t want to worry about your mortgage rate and payment going up. When interest rates are low, as they are now, a fixed rate mortgage is far and away the best loan program for most people.
- Monthly payments are fixed over the life of the loan.
- Interest rate never changes, so you are protected if rates go up.
- Low to no down payment
- Higher interest rate than the fixed portion of an adjustable rate mortgage (ARM).
- Higher mortgage payments than the fixed portion of an adjustable rate mortgage.
Adjustable Rate Mortgages (ARMs)
Fully Amortized ARMs
10/1 Arm (Fixed for 10 years;adjustable for remaining 20 years)
7/1 Arm (Fixed for 7 years; adjustable for remaining 23 years)
5/1 Arm (Fixed for 5 years; adjustable for remaining 25 years)
3/1 Arm (Fixed for 10 years; adjustable for remaining 20 years)
Purchase or Refinance
Today’s adjustable mortgages are actually hybrids – they are fixed for a certain amount of time before becoming adjustable. The 5/1 ARM, for example, is fixed for 5 years and adjustable for the remaining 25 years. In the 5/1 ARM example, after the first 5 years of fixed rates, the interest rate can adjust once a year, either higher or lower.The upside of an ARM is that you can get a lower interest rate (vs. a fixed 30year mortgage) for the fixed portion of the ARM. The downside is the risk that rates will rise after the fixed portion is over. In a lowrate environment, we recommend fixed-rate mortgages for most people. But there are exceptions. For example, if you know that you absolutely, positively will sell your home after a certain number of years, then an ARM might make sense. For example, let’s say you know you will move in 5 years. In that situation, a 5/1 ARM will give you lower payments over those 5 years than a fixed-rate mortgage would. So here, an ARM makes sense. But you must be confident that you will sell that home or refinance within that 5year period – otherwise you run the risk that rates will rise and your payment will go up.
- Lower monthly payment during the fixed portion.
- If interest rates move lower, your rate and payment may go down.
- If interest rates move higher after the fixed portion of your loan, your payments could be higher.
First-Time Homebuyer Programs
These programs make it easier for first-time buyers to save for a down payment and qualify for a loan. Down payment requirements can be as little as 1% of the purchase price. FHA first mortgages require a 3.5% down payment. First-time buyer programs are available as fixed-rate, 15, 20 and 30year mortgages. If you’re looking to buy your first home, give us a call –we’ll let you know whether this program is right for you. We’ll also get you pre-approved, which identifies your purchasing power and helps you move quickly once you find that perfect house.
- Down payment as low as 1%.
- Less income required to qualify, but FICO must be at least 640.
- Only available up to $417,000, including mortgage insurance premium (MIP).
- Homebuyer education required.
- More documentation required than with conventional loans.
- Longer process to close –usually 45 to 60 days.
FHA Streamline Refinance
Do you have an FHA loan that you want to refinance? The FHA streamline refinance lets you reduce the interest rate on your current home quickly, with less paperwork. No appraisal is required. Instead, you can use your home’s purchase price as the current value, regardless of the home’s current market value. Even if you are “underwater,” you can still refinance with this program.
The loan purpose must show a “Net Tangible Benefit,” such as refinancing from an ARM to a fixed mortgage or reducing the principal, interest and mortgage insurance component of the mortgage by 5% or more. Cashout to pay bills does not qualify. You must have a 12month history of ontime mortgage payments to qualify. And finally, the original loan must be an FHA loan – conventional loans owned by Fannie or Freddie do not qualify.
- Lower rates and payments with less paperwork.
- No appraisal required.
- No verification of income, but must be employed.
- No credit score verification.
- Cash-out is not allowed.
No Upfront Cost Mortgages
Purchase or Refinance
Loans with no cost upfront let you buy a home or refinance without paying costs at closing. These loans can be made for purchases, but they are most popular for refinances. No points or fees are paid at closing, although you do have to pay for an appraisal.If you’re refinancing, and you can get a lower rate than your current rate for no cost (other than your appraisal), why wouldn’t you? At Catalyst, we have clients who refinanced with this program over and over as rates dropped! This program does NOT add the closing cost fees to the principal, so your loan balance remains the same. Instead we use a portion of the Service Release Premium (SRP) to credit against your closing costs (for an explanation of SRP, see How Mortgage Lenders Make Money).
- For refinances, no closing costs. You pay only for your appraisal.
- For purchase loans, no closing costs. You pay only your down payment and appraisal.
- Interest rates are higher than loans where you pay closing costs.
- Payments are higher than loans where you pay closing costs.
HARP 2.0 Refinance
HARP stands for Home Affordable Refinance Program. HARP 2.0 was created to help homeowners refinance into lower rates and/or fixedrate mortgages when their home values have declined to the point that they cannot get conventional financing. If your loan-to-value is greater than 80% – even if you owe more than your home is worth, you may qualify for a HARP refinance. Give us a call and we’ll let you know if you qualify.Here are some of the HARP guidelines:
- The mortgage must be owned by Freddie Mac or Fannie Mae (the vast majority of mortgages are owned by Fannie and Freddie. We can tell you whether Fannie or Freddie owns your loan).
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously.
- You must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.
VA Loans for purchase and refinance.
You’ve earned the benefits – now take advantage of them.
If you are ready to buy a home or refinance, Catalyst Mortgage proudly offers veterans and active duty personnel excellent loan terms!Now you can maximize the benefits you have already earned. Talk to us today to learn how you can save a bundle.
Who is eligible?
- Active Service Members
- National Guard/Reserves
- Eligible Surviving Spouses
- Prior short sales or bankruptcy OK!**
Because the Government subsidizes your loan, you will enjoy the following features and benefits:
- 100% financing… no mortgage insurance
- Purchase, rate/term refinance, and cash-out refinance options
- No down payment required*
- Seller-assistance options
- Low minimum credit scorerequirement
- Lower interest rates
- Virtually eliminate your closing costs
- (VA limits the fees you can pay)
Eligible properties include:
- 1 to 4unit property
- Manufactured homes
Some restrictions may apply. All borrowers are subject to credit approval. Program subject to change.
Interest Rate Reduction Refinance Loan
The VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your interest rate by refinancing your existing VA home loan. By obtaining a lower interest rate, your monthly mortgage payment should decrease. You can also refinance an adjustable rate mortgage (ARM) into a fixed rate mortgage.
- A reverse mortgage or home equity conversion mortgage (HECM) is a special type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments.
- A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash.
- Unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.
- Borrowers are still responsible for property taxes and homeowner’s insurance.
- To be eligible, you must be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home.