107% Purchase Programs
Imagine buying a home using no money of your own to get the financing required. This is the advantage 107% purchase programs provide. Not only does the lender allow the buyer of a new home to finance the total cost of the price of the home, they also cover the closing costs and fees for up to 107% of the price of the home. The only catch is that you must qualify from a credit standpoint, and the standards for qualification are higher than that of a typical fixed rate mortgage.

0% Down Investment Properties
Similar to 107% purchase programs, this is a no money down financing proposition designed for investment properties. Again, you must meet higher standards for qualification, but if you do, the lender will allow you to purchase investment properties with zero money down and no money out of pocket.

Minimum Payment Programs
As a borrower, you have the option of paying only the monthly interest as your mortgage payment, allowing you to make your budget dollars stretch further. This allows you the option of making larger payments each month and applying the extra payments to the principal of the loan, but only being required to make a the minimum monthly payment covering the interest on the loan. This is a great option to consider if you intend to keep the house you are purchasing for a relatively short period of time, say less than five years.

FHA Loans
Allstate is a licensed and FHA Government Approved Broker. That means we are able to secure FHA loans that allow qualified borrowers to finance up to 97% of the purchase of their home. It also allows us to provide “streamline” refinancing of FHA loans. The distinct advantage of FHA loans is that they have more flexible qualifying guidelines and aggressive interest rates, not only for first time buyers, but also for buyers who may have a few bumps and bruises in their credit history.

VA Loans
Allstate is also a licensed and approved Veterans Administration broker. We proudly provide American Veteran’s with specific lending options that offer more flexible and aggressive terms and rates as a benefit for the services they have rendered to their country.

Fifteen-Year Fixed Rate Mortgage
A fixed rate mortgage features interest rates and monthly payments that will not change.during the life of the loan. You do however have the option of paying more than the required monthly payment. This will reduce the amount of interest you pay on the loan. A fifteen-year fixed rate mortgage offers all the advantages of the 30-year loan, at a lower interest rate -- and you’ll own your home nearly twice as fast. The downside is that you’re also committed to a higher monthly payment. However, if you like the idea of paying off your loan as quickly as possible you may also consider a 30-year fixed-rate loan and simply make larger payments than the mortgage requires. The difference in interest rates between the two is marginal and you’ll have the opportunity to pay the loan off in 15 years, saving substantially on the interest costs. See the example below.

Example
Loan: $100,000
30-year fixed-rate mortgage: 7% interest rate
Payment: $665.30 per month
Total interest paid over 30 years (360 payments): $139,508
15-year fixed-rate mortgage: 6.80%. interest rate
Monthly payment: $887.68
Total interest paid over 15 years (180 payments): $59,978.

Thirty-Year Fixed Rate Mortgage
The monthly payments are quite a bit lower than the 15-year fixed rate mortgage, but you pay more interest because you make twice as many payments. This is a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then an adjustable-rate mortgage (ARM) is usually cheaper. As a rule of thumb, it’s harder to qualify for fixed-rate loans than ARMs. When interest rates are low, fixed-rate loans are not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run because you can lock in a rate for the life of your loan, protecting yourself in the invent of soaring interest rates.

Adjustable Rate Mortgages (ARM)
When it comes to ARMs there’s a basic rule to remember: the longer you ask the lender to charge you a specific rate, the more expensive the loan. The rate of the loan is not fixed and generally rises when the prime interest rate rises, according to what is dictated by our federal government.

Hybrid ARM
Also called 3/1, 5/1 or 7/1, the Hybrid ARM has become increasingly popular because it can offer the best of both worlds: lower interest rates and a fixed payment for a longer period of time than most adjustable rate loans. For example, the 5/1 Hybrid ARM has a fixed monthly payment and interest for the first five years of the loan, at which time it then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It’s a wise choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

2/1 Buy Down Mortgage
The 2/1 Buy-Down Mortgage allows the borrower to qualify at below market rates so they can borrow more. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place for three full years or more will keep the average interest rate in line with the original market conditions.

Annual ARM
This loan has a rate that is recalculated once a year.

Monthly ARM
With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually lower on this ARM, because the lender is only committing to a rate for a month at a time, so the lender’s vulnerability is significantly reduced, while the lendee’s vulnerability to higher interest rates increases.

Negative Amortization (Neg. Am) Loan
The most powerful deferred-interest loan, and probably the most misunderstood because of its many options. In essence, the lender allows the borrower to make monthly payments that are less than the accruing interest. Therefore, if the borrower chooses to make the minimum monthly payment, the loan balance will increase by the amount of interest not paid on the loan. The power of this loan lies in the borrower’s ability to choose between making the full loan payment, or the minimum payment, or any amount in between. If a borrower's income varies throughout the year (due to commissions, bonuses, etc.), the borrower can make a lower payment during the “lean times”, and then make higher payments when funds are readily available.

Jumbo Loan
A jumbo loan is, essentially, a 30-year mortgage but with a loan amount above the conventional loan limit, in this case $275,000 for a single-family home in the lower 48 states. Because a larger loan amount is outstanding, lenders have more risk and so interest rates are somewhat higher than for conventional financing.


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