Intelliloan Explains 6 Important Home Loans for 2013

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Intelliloan has released this list of the 6 different types of loans that are common to the lending world to help customers become more informed, allowing them to choose the loan that works best for their needs.

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Intelliloan

At Intelliloan we strive to help our customers fully understand the ins and outs of the loan approval process. Our customers need to know what their options are.

“At Intelliloan, we strive to help our customers fully understand the ins and outs of the loan approval process. Our customers need to know what their options are and unlike other lending institutions, we do not try to confuse them by inundating them with jargon that they do not understand,” says an Intelliloan representative. “We work towards helping our customers by supplying them with the information that they can actually use, to make a wise decision on obtaining their loan. That is why we have released this list of the six different types of loans that are common to the lending world. We want our customers informed so that they can choose the loan that works best for their needs.”

Intelliloan Offers an Explanation of the 6 Different Types of Loans

Conforming Fixed 30-Year Loan

This type of loan is one of the most popular choices for homeowners who plan on staying in their home long-term. The Conforming Fixed 30-Year Loan offers homeowners a fixed payment that never changes, throughout the life of their loan. Individuals can obtain this loan for single family homes, town homes, and condos. With a small down payment of as little as 3%, this loan is very attractive to families who are purchasing a home. With this type of loan, the outstanding balance continues to dwindle each month, as the payment amounts are applied to the balance. It is a straight forward approach to a mortgage loan, allowing borrowers to borrow as much as $625,500*. Along with all of these advantages, the Conforming Fixed 30-Year Loan never charges a prepayment penalty, so you can cut your term by just adding a little to principal each month, paying your home off ahead of schedule.

Conforming Fixed 15-Year Loan

Like the Conforming Fixed 30-Year Loan, the 15-Year Loan offers individuals a loan for single family homes, town homes, and condos. Borrowers can borrow as much as $625,500* and can pay as little as 3% down for their loan. One major difference between the 30-Year and the 15-Year is that the 15-Year offers lower interest rates. Intelliloan often sees homeowners choose this loan who want to eliminate their debt more quickly. It requires homeowners to pay more each month over a thirty year loan, but the entire difference goes to principal and then some, allowing the outstanding balance to come down in half the time that it takes for the 30-Year Loan. As with the 30-Year Loan, the monthly payment never changes and each payment that is made decreases the outstanding balance. Along with the 30-Year Loan, the 15-Year Loan also charges no prepayment penalty.

Intelliloan Explains FHA Fixed 30-Year Loan

FHA stands for Federal Housing Administration. This type of loan is a federally-insured loan and allows buyers to purchase a single-family home, condo, or town home. Borrowers may borrow up to $729,750*, with an incredibly low down payment of as little as 3.5%. This 30-Year Fixed Loan is a great option for homeowners who plan on making a commitment to staying in their homes long-term. As with other Fixed Loans, the FHA Loan payments never change, through the life of the loan. These loan types do not charge prepayment penalties and homeowners may refinance without going through appraisal and income qualifying. Additionally, if you should ever choose to sell your home the FHA loan is fully assumable, allowing a buyer to enjoy the same low rate that you locked in today.

FHA Fixed 15-Year Loan

FHA stands for Federal Housing Administration. This type of loan is federally-insured and is a great loan choice for those who are first-time home buyers. As with the FHA 30-Year Fixed Loan, the down payments on this type of loan are as little as 3.5% and borrowers can borrow up to $729,750* for single-family homes, condos, and town homes. The payments for this type of loan are higher than the 30-Year Fixed Loan, but allow homeowners to pay off their debt in half the time. As with other Fixed Loans, the payment amounts stay the same through the life of the loan and there is never a prepayment penalty. Borrowers have the option to refinance without going through appraisal and income qualifications, making the process much easier for homeowners.

FHA 5-Year Arm

Like most other loan types, this loan is available for single-family homes, town homes, and condos. The loan amount is available for up to $729,750*, with down payments as low as 3.5%. The 5-Year Arm is a variable interest rate loan. This simply means that over the life of the loan the rate may change, however for the first five years of the loan the interest rate is fixed and does not change. After five years, the interest rate could begin to adjust up to 1% per year, with a maximum adjustment amount of 5%, from the beginning interest rate. The 5-Year Arm is a federally-insured loan. Intelliloan believes this loan is a great option for borrowers who want to pay off their debt quickly. It is also geared towards borrowers who anticipate that they may have a change in their financial or housing situation in the future. One of the attractive advantages of this loan type is that the loan can be refinanced to a fixed rate loan at any time, with no pre-payment penalty.

FHA 3-Year Arm

Like the 5-Year Arm, the 3-Year Arm is also federally-insured. The borrower may borrow as much as $729,750* for single-family homes, town homes, and condos. The down payments on this loan type requires as little as 3.5%. The 3-Year Arm is a variable interest rate loan. To understand what this means, it is important to break down the basics of the loan. For the first three years of the loan, the interest rate is fixed, and after the three year period, the interest rate may begin to adjust as much as 1% per year and up to 5% of the initial interest rate amount. Intelliloan generally sees this type of loan as a great option for borrowers who anticipate an increase to earning in the near future or anticipate selling or refinancing in a few years. Like the 5-Year, one of the attractive advantages of this loan type is that the loan can be refinanced to a fixed rate loan at any time, with no pre-payment penalty. The 3-Year Arm is perfect for borrowers who anticipate changes to their income or housing situations in the future.

*Please note: Loan amounts are subject to the county loan limits and price adjustments.

As a trusted source in the industry, Intelliloan offers this information to help its customers make better decisions in their loan considerations. Each loan works well with different borrowers and different situations. To find out more about what type of loan will work best with your particular situation, call us at Intelliloan: 877-263-8499.

About Intelliloan

Intelliloan is a mortgage banker and a direct lender. Intelliloan was established in 1993 and is approved by HUD, FHA, and FNMA. Intelliloan is licensed to practice in 13 states and has been a member of the Better Business Bureau since 1999, with an A+ rating. NMLS 3290

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