Mortgage Loan Programs

A loan program is just a way of saying what type of loan you are applying for. There are loan programs to suit just about every kind of borower. There are programs for poor credit, no credit, great credit, no way to prove income, high debt ratios, etc.

An experienced loan officer will know all of these programs so that they can help get almost any borrower a loan. Not everyone will qualify for a mortgage, and there is no way around that. However, with the wide array of loan programs available, there is a good chance that YOU can get a loan TODAY.

Nearly 80 % of all mortgages today are being negotiated by Mortgage brokers. This is because today there are so many different programs to choose from - the process can indeed become daunting. Let a mortgage professional guide you thru the myriad of choices to find the program that suits your needs.

Mortgage brokers are a good source for unique loan programs. Local and commercial banks usually grant loans only to those who have perfect credit history, sufficient income and with strong assets. In addition to these type of loan programs, most mortgage brokers also have access to niche loan products for home buyers in less than perfect financial situations, such as high debt-to-income ratio, high loan-to-house value ratio, no-income-verification, bad credit, history of bankruptcy and foreclosure, etc. Some brokers also have loan programs for unique homes, such as multi-million dollar home, condominium and cooperative units that do not qualify Fannie Mae guidelines, etc.

One example of a loan program that has become popular recently is the pay option ARM. Basically, it gives you the option of making four different payments each month:

-Minimum payment (you actually pay less than the interest due for the month, and the difference is added to your loan amount)
-Interest only payment (you only pay the amount of interest that is due for the month)
-30 year amortization (pay the amount that it would take to pay off the loan in 30 years)
-15 year amortization (pay the amount that it would take to pay off the loan in 15 years)

As you can see, this loan program offers a lot of flexibility. However, it is based on an ARM, so the interest rate is always changing. Also, it can be tempting to make the minimum payment every month, but if you do, you'll find yourself owing more on your home then when you started. Many innocent homeowners have been lured into this loan with promises of low rates or payments, only to find that things weren't as they appeared.

There are literally thousands of different mortgage loan programs available out there. To name a few: 3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM, Pay Option ARM, 30/15 Balloon Mortgage, 30/7 balloon, 30 year fixed rate, 20 year fixed rate, 15 year fixed rate, 3/1 interest only ARM, 5/1 interest only ARM, etc.... There are also different income verification programs available, such as: stated income stated asset, stated income verified asset, no income no asset, no ratio, no doc., 12 months bank statements, 24 months bank statements, and many many more. This is just a very short list of some of the thousands of mortgage loan programs available. Many times different loan programs are combined also such as: an 80/10 (1st and 2nd mortgage), cash-out, interest only loan with no income documentation. While all this can sometimes be very confusing to a homeowner, a good mortgage broker can find the "right" program that best suits each unique situation of each borrower.

One very important thing to keep in mind about mortgage loan programs is that they are never carved in stone. Changes in market conditions and investment climates cause lenders to have to make changes to their programs and guidelines. Don't make the mistake of thinking that just because a program that you qualify for exists today that it will always be there.

» DISCLAIMER: The information contained in this article on 'Mortgage Loan Programs' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.