MyCommunityMortgage

The MyCommunityMortgage^TM is a flexible mortgage product for low- and moderate-income borrowers.

Key Features

• Borrower contribution of just $500 toward down payment and/or closing costs
• Remaining down payment can come from a wide range of sources, such as a gift from a family member; a gift, grant or loan from a nonprofit organization, municipality or employer; or the borrower's own funds
• Loan-to-value ratios permitted up to 100 percent for 1-unit properties.
• Eligible for purchase of a single-family home or condo or a two-family home with 3 percent borrower contribution
• Extra flexibility on credit histories, including consideration of nontraditional credit histories
• Extra flexibility on income sources including consideration of boarder income even if boarders are not related to the borrower
• Cash reserves at closing not required in most cases
• Part-time and overtime income is considered

The following options are available for MyCommunityMortgage:

• Community Solutions^TM for teachers, police, firefighters, and healthcare workers
• Community HomeChoice^TM for borrowers with a disability or a family member with a disability
• Energy Efficient option for buyers of energy-efficient homes or those wanting to make energy efficient improvements to an existing home
• Native American Conventional Lending Initiative option designed to make conventional lending possible for homes built on tribal trust or otherwise restricted lands

The following products are related to MyCommunityMortgage:

• Community Renovation 1- to 4-Family for low- to moderate-income borrowers purchasing and renovating single-family or 2-4 unit properties in a single mortgage
• Enhanced Community 2-4-Family for low- to moderate-income borrowers purchasing 2-4 unit properties

Simultaneous Second Mortgages

Simultaneous Seconds is originated and closed in conjunction with your first mortgage, which brings you the benefits of just one loan processing and closing. Your monthly payment will be lower than it would be with a single, larger first mortgage because there is no private mortgage insurance required.

Key Features

• High loan-to-value ratios for both purchase and refinances are available.
• No borrower-paid mortgage insurance is required.
• There is no minimum loan amount.
• Second mortgage terms available include 15-year or a 30-year-due-in-15 balloon.
• No separate escrow deposit is required for the second mortgage.

Balloon Mortgage

The Fannie Mae seven-year balloon mortgage is a fixed-rate mortgage with a term of seven years. The principal and interest are amortized over a longer period (30 years) than the actual term of the mortgage. At the end of the balloon period, you may pay off the outstanding balance with a lump-sum payment or exercise the option to refinance for the remaining term.

The option to refinance is conditional, meaning you have to meet certain conditions (such as a history of timely payments or no second liens on your property). Conditions may include payment of closing costs and a lender fee, as well as no 30-day late payments in the previous 12 months and no other liens on your property.) You must occupy your property at the time of refinancing. You need not re-qualify for this loan when refinancing at the end of seven years as long as the new interest rate is not more than five percent above the current interest rate. The refinance condition is not automatic — you must exercise the option.

Key Features

• This mortgage is ideal if you plan to sell or refinance your home within seven years and want a low monthly payment during that time.
• The interest rate you pay on a balloon mortgage is usually lower than a comparable 30-year fixed-rate mortgage.
• The refinance option provides a "safety net" in case a planned relocation doesn't take place or economic conditions prevent you from moving to a larger home.

Biweekly Mortgage

A mortgage with affordable payments and faster reduction of principal
Let the calendar work for you! With a Biweekly Mortgage, you make a mortgage payment every 14 days, instead of once a month. The result? By making smaller payments more frequently, you will pay off your mortgage sooner and save thousands of dollars in interest over the life of the mortgage.A Biweekly Mortgage gives you the stability of a fixed-rate mortgage and the convenience of having payments automatically deducted from your checking, savings, or other deposit account.

Key Features

• By making more frequent payments, you pay off the mortgage much sooner. For example, with a Biweekly Mortgage, a loan that normally takes 30 years to pay off will take 22 years to pay off at current interest rates. You will then own the home debt free and have saved 8 years' worth of interest payments!
• Your mortgage payment is deducted automatically from your checking, savings, or other deposit account every 14 days–26 or 27 times a year in all. Many people find this an easy way to manage payments, especially if they pay their mortgage at the same time as they receive a biweekly paycheck. The Biweekly Mortgage requires no additional monthly fees, either.

Adjustable Rate Mortage (ARM)

ARMs Offer Lower Rates
Staying in the same home for 30 years may not be in your plans — which is one reason to consider an adjustable-rate mortgage (ARM). An ARM generally offers a lower initial interest rate than a fixed-rate mortgage. With lower monthly payments in the initial years of your mortgage, you may qualify for a larger mortgage amount if you choose.

If one or more of these situations describes you, an ARM might be a good fit:

• You plan to stay in your home for a relatively short period of time
• You want lower initial monthly payments and can handle potential payment increases in the future
• You want to qualify for a larger mortgage amount, and you expect your income to go up over time

Key Features

• You can select an ARM with a fixed-rate period of up to 10 years. The interest rate and your monthly payment stay the same during the fixed-rate period.
• After that, the interest rate adjusts (usually annually) based on a specific financial index — for example, one frequently used index is tied to the price of U.S. Treasury bills or securities.
• In addition to the index, an additional percentage, known as a "margin" may be added to the index value to determine your interest rate at the time of adjustment.
• The rate moves up or down, depending on how interest rates have moved since you took out your loan. This means that when interest rates go up, your monthly mortgage payments may go up as well. On the other hand, when interest rates go down, your monthly mortgage payments may also go down. ARMs typically have an interest rate cap (or maximum) on the periodic adjustments and for the life of the loan, so you know that your monthly payment cannot ever increase above a certain amount.

An adjustable rate is an option

30-Year Fixed-Rate Mortgage

The most popular type of mortgage, the 30-year fixed-rate loan is most appealing to borrowers who want to stay in their homes for a long period of time and who want to enjoy consistent interest payments during this period. Other benefits include keeping housing expenses to a minimum while maximizing mortgage interest deductions for income tax purposes.

Key Features

• This mortgage can require a low down payment, sometimes only 3 or 5 percent.
• Payments are stable — your monthly mortgage payment will not increase.
• The 30-year fixed-rate mortgage provides maximum interest deduction for tax savings.