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Mortgage Partners
FICO
According to MyFico.com, "Along with the credit report, lenders can also buy a credit score based on the information in the report. That score is calculated by a mathematical equation that evaluates many types of information that are on your credit report at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the score identifies your level of future credit risk.
In order for a FICO score to be calculated on your credit report, the report must contain at least one account which has been open for six months or greater. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough information - and enough recent information - in your report on which to base a score.
About FICO scores Credit bureau scores are often called "FICO scores" because most credit bureau scores used in the US are produced from software developed by Fair Isaac and Company. FICO scores are provided to lenders by the three major credit reporting agencies: Equifax, Experian and TransUnion."
Loan Programs
| Years you plan to stay in the house |
Recommended Program(s) |
| 1 - 3 |
3/1 ARM |
| 3 - 5 |
3/1 ARM or 5/1 ARM |
| 5 - 7 |
5/1 ARM or 7/1 ARM |
| 7- 10 |
10/1 ARM or 30 year Fixed |
| 10+ |
30 Year Fixed or 15 Year fixed |
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What Are The Basic Loan Types?
There are many loan products designed to meet the borrowers individual criteria. Most of these products fall into a few basic loan types.
30, 20, 15, 10 YR Fixed Rate
Payment and rate stay the same from start to finish
5 and 7 Year Balloons
Lower start rate. Some of the balloon programs may be converted to an adjustable rate or a fixed rate after the 5 or 7 years, with very low fee and attractive rate.
Adjustable Rate Mortgage (ARM)
Lowest start rate. Adjusts either every 6 months or every 12 months depending on program and grade and is based on the economy. Typically has a 2% rate cap per adjustment and a 5%-6% ceiling depending on lender.
3/1 ; 5/1 and 7/1 Intermediate ARM
Rate is fixed for the first 3, 5, 7, or 10 years, then converts to a one year or 6 month ARM for remainder of term.
Interest Only ARMS and Balloons
These programs require the payment of interest only for a set period of time. The rate may adjust every month, six months, year or, like the intermediate ARM programs, may be fixed for 3,5,7 or 10 years. Some programs allow for negative amortization. Some have a monthly minimum payment. Options regarding the documentation of income vary. Specialty products require strict underwriting standards. Contact us to personally discuss your situation.
What is a 1031 Tax Deferred Exchange?
A tax deferred exchange is simply a method by which a property owner trades one property for another without having to pay any federal income taxes on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale of the property. But in an exchange, the tax on the transaction is deferred until some time in the future, usually when the newly acquired property is sold.
There are many myths regarding Tax Deferred Exchanges.
- Exchanges require two parties who want each other's properties.
- The like-kind requirement limits an exchange's options.
- In an exchange, title on the exchanged properties must pass simultaneously.
For answers to these and any other questions you may have, please call our TAR- Certified 1031 Tax Exchange Specialist David Troxler 865-680-9195.
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