Loan Programes

• Monthly payments are fixed over the life of the loan
• Interest rate does not change
• Protected if rates go up
• Can refinance if rates go down

• Higher interest rate
• Higher mortgage payments
• Rate does not drop if interest rates improve

• Lower initial monthly payment
• Lower payment over a shorter period of time
• Rates and payments may go down if rates improve
• May qualify for higher loan amounts

• More risk
• Payments may change over time
• Potential for high payments if rates go up

• Lower initial monthly payment
• Lower payment over a shorter period of time
• Many balloon mortgages offer the option to convert to a new loan after the initial term.

• Risk of rates being higher at the end of the initial fixed period
• Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option

• Lower down payment
• Easier to qualify
• Sometimes you may get lower rate

• May be subject to income and property value limitations
• Some programs which have government subsidies may have a recapture tax if you sell the house too early.

• Don't need to verify income
• Faster approval

• Higher rates
• Higher down payment

• No closing costs
• Less money required to close

• Higher rates
• Higher payments

• Potential for reestablishing credit if you pay your mortgage on time.
• When used for debt consolidation, you may be able to reduce your monthly debt payment

• Higher rates
• Terms may not be as favorable
• Harder to get long term fixed loans
• Loans may have prepayment penalties

• You only borrow what you need
• Pay interest only on what you borrow
• Flexible access to funds
• Interest may be tax deductible

• Rates can change. The maximum interest rate is normally high.
• Payments can change
• Harder to refinance your first mortgage

• Fixed payments
• Interest may be tax deductible

• Higher interest rates than on 1^st mortgages
• Harder to refinance your first mortgage

FHA UPDATE: President Bush has announced a plan to assist with the problem in the Adjustable Rate Mortgage recalculation, & FHA programs... The Federal Housing Administration is a government agency that backs mortgages known as "FHA" mortgages through insurance.  FHA allows for maximum financing of a new purchase or refinance of an existing loan.  In the coming days, the FHA will launch a new program called FHA-Secure. This program will allow American homeowners who have got good credit history but cannot afford their current payments to refinance into FHA-insured mortgages. This means that many families who are struggling now will be able to refinance their loans, meet their monthly payments and keep their homes.

FHA loans are automatically underwritten or can be submitted for manual underwriting when circumstances require.  Please call us at (800) 475-0123 or click here to contact us with questions regarding your eligibility. Approved Funding is an approved FHA Lender and can assist with any FHA/HUD questions or concerns.