Conventional

Fixed Rate Mortgages - The type of mortgage most often chosen by homeowners in the United States is the 30-year fixed rate mortgage. The primary advantage of a fixed rate mortgage is its payment stability. The principal and interest portion of the monthly payment remains constant for the life of the loan. An alternative to a 30-year fixed rate mortgage is the 15-year fixed rate mortgage. The shorter amortization period or loan term provides for a higher monthly payment, but significant interest savings over the life of the loan.

First & Second Mortgage Loans - 80/10/10 and 80/15/5 loans (Loans with No PMI) Traditionally, Private Mortgage Insurance (PMI) has been required for loan amounts which exceed 80% of the purchase price or value of the home. PMI protects the lender against loss resulting from default by the borrower. PMI is not tax deductible and can be expensive. Through the use of a second mortgage, a buyer may finance more than 80% of the purchase price or appraised value and still avoid PMI. A home buyer can make a down payment of as little as 5% and receive an 80% first mortgage and a 15% second mortgage (80/15/5). While the second trust or subordinate loan generally has a higher interest rate, the combined principal and interest payments are still lower than the payment with mortgage insurance. Signature provides both the first trust and the second trust loans simultaneously.

Adjustable Rate Mortgages (ARMs) - An ARM offers the benefit of an interest rate lower than that of a fixed rate mortgage for a specified period of time. A 1-year ARM provides an interest rate fixed for one year. After that time, the interest rate may adjust up or down each year subject to annual and lifetime adjustment limits or caps. More commonly selected ARMs are the 3/1, 5/1, 7/1 and 10/1 ARMs. These programs are hybrids of the 1-year ARM and offer rates fixed for 3, 5, 7 or 10 years. At the end of those fixed periods the interest rates may adjust up or down subject to the annual and lifetime adjustment caps. ARMs can be particularly helpful to first-time homebuyers who expect their income to increase over time and wish to increase their current purchasing power. ARMs are also useful to those individuals who expect to own a house only for a limited time.

Interest Only Loans - Interest Only loans provide the borrower with a lower monthly payment for a period of time. During that specified period the borrower is not required to make any payments toward principal - only interest payments are required. The borrower may elect to make principal payments without penalty. Interest only options may be available on fixed rate as well as adjustable rate loans. They are most commonly chosen in connection with ARMs as a means of increasing purchasing power.

100% Financing - Most mortgages do not cover the full purchase price of the property, requiring the borrower to come up with the difference as a down payment. However, Signature Mortgage offers 100% financing options to qualified buyers. Borrowers will often have the income sufficient to afford the monthly payments associated with a home loan, but insufficient liquid assets to meet down payment and closing cost requirements. 100% Financing options may alleviate the need for larger sums of ready cash. Most 100% Financing programs still require the borrower to demonstrate some level of savings.

Low Documentation and No Documentation Loans - Credit scoring and computerized underwriting have allowed the mortgage industry to reduce the level of income and asset documentation in many loan situations. Quite often a single paystub and the most recent W-2 are sufficient to document income and the most recent account statement is sufficient to document an asset. Some purchasers may require No Ratio or No Income/No Asset (NINA) loan scenarios. A No Ratio loan is one in which income is not considered in the underwriting process at all. A NINA loan does not take income or assets into account as part of the application. Borrowers are qualified based upon credit scores and the level of their down payment. No Ratio and NINA loans generally have a higher interest rate or higher points than full documentation loans.

Community Lending Programs -Fannie Mae, Freddie Mac and various state and local entities have developed programs and underwriting guidelines designed to assist moderate and low-income purchasers realize the dream of owning a home. Signature Mortgage is happy to participate in a variety of these programs. Typical program incentives include lower down payment and cash requirements, higher debt-to-income ratio allowances and less stringent credit history standards.

Home Equity Loans - Home Equity loans are subordinate loans which are used for the purchase of a home or to provide borrowers with the opportunity to access the equity in an existing home. The interest rates are generally fixed and may be amortized over 30 or 15 years. 30-year amortized loans usually have a balloon payment at the end of 15 years

Home Equity Line of Credit (HELOC) - A HELOC is a revolving line of credit which is usually used as a second trust for the purchase of a home or as a means of accessing equity in an existing home. HELOCs are variable rate loans tied to the Prime Interest Rate. Interest only payments are calculated on the outstanding balance for the month and billed for that month. Payments may be made against the principal. As the principal balance is paid down, that amount of credit becomes available to the borrower.

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FHA Financing

Federal Housing Administration (FHA) Loans
As part of the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration is primarily responsible for insuring residential mortgage loans made by qualified lenders. FHA loans are popular for first time homebuyers because the income and credit requirements tend to be more lenient than those of conventional loans. Though commonly referred to as "FHA loans," the loans are not made by the FHA, but rather the FHA insures the lender against loss. FHA programs include 30 and 15-Year Fixed Rate loans, and a 1- year, 3/1 and 5/1 adjustable rate mortgages. All programs require a minimum 2.25% down payment. The current FHA maximum loan in the Washington Metropolitan area is $362,750. All FHA loans require the borrower to pay mortgage insurance.

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VA Financing

Department of Veterans' Affairs Loans
The VA provides a loan guarantee program to eligible active duty members and veterans of the Armed Forces. VA loans have more lenient underwriting guidelines than conventional loans and require no down payment. In return for lenders providing loans with less restrictive guidelines, the VA provides a limited guarantee against losses as a result of default. The maximum VA loan amount is indexed to the conforming loan limit, currently $417,000. In addition to 30 and 15-Year Fixed Rate loans, 3/1 and 5/1 ARM loans are now available under the VA program. Individuals eligible for a VA loan should contact the Department of Veterans’ Affairs to obtain their certificate of eligibility. Signature Mortgage is happy to assist in that process.

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Construction/Permanent Financing

Construction-to-Permanent Financing is a unique type of financing used to fund the cost of building a new home or making major modifications to an existing home. The financing is divided into two distinct phases. The first phase is the construction phase. Signature Mortgage will provide a credit line of up to 90% of the value of the home upon completion as determined by an independent appraiser. During the construction period funds are dispersed as draws against the line of credit as construction milestones are met. Accrued interest is billed on a monthly basis during this phase. Upon completion of the construction, the line of credit is converted to permanent financing.