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Types of Loans

The ability to repay (what is known as a Qualified Mortgage), must follow a set of lending regulations created by the federal government’s Dodd-Frank Mortgage Act. Mortgage lenders must follow these rules if they wish to resell their loans on the secondary market (Fannie Mae and Freddie Mac) or to have their loans insured by FHA, VA, or the USDA.

Because these regulations often make it difficult for a large number of borrowers to qualify, we specialize in Non-Qualified Mortgage programs. A Non-QM loan is not inherently high-risk, it is simply a loan that doesn’t fit the complex rules associated with the government's Dodd-Frank Mortgage Act.

Here is a partial list of some of the individuals these Non-QM programs will help:

* Foreign Nationals can purchase using our Non-QM Foreign National buying program. Some of the features of this program include no Visa requirement, no prepayment penalties, self-employed borrowers qualify and if they don’t have domestic credit a FICO is not required.

* Borrowers who have just finished a Bankruptcy and have a minimum 580 credit score don’t need to wait to purchase again, we have the Non-QM program for you.

* The self-employed person who doesn't take regular paychecks can use Directors Financial Group’s Bank Statement program.

* Investors who like to buy have no restrictions on how many properties they can own with our Homeowner’s Access Non-QM product.

If you have been turned down and want to buy, contact us and see how a Directors Financial Group’s series of Non-QM products can help you achieve your goals.

A jumbo loan exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. Jumbo borrowers typically have excellent credit and provide larger down payments, when compared to conforming loans.

Interest Only Jumbo Loans

For affluent homebuyers with irregular incomes, the interest-only mortgage jumbo product, as its name implies, allows the option of paying only the interest for the first few years of the loan.

You can pay principal if you wish, with the interest-only as an option. In the country's highest-cost housing markets, a jumbo loan is a mortgage for more than $625,500.

Interest-only loans are structured like an adjustable-rate mortgage. The interest-only period lasts for the first five, seven or 10 years. After that, the rate typically adjusts annually, and the borrower pays principal, as well as interest. When it resets, the payments can go up pretty significantly, even if the interest rate does not change much.

A VA loan is a mortgage loan that’s backed by the Department of Veterans Affairs (VA) for those who have served or are presently serving in the U.S. military. The VA backs loans made by private lenders to veterans, active military personnel, and military spouses who qualify.

There are three types of VA loans: purchase loans, Interest Rate Reduction Refinance Loans (or IRRRL, also referred to as a streamline refinance loan), and cash-out refinance loans. There are many benefits to a VA loan, but one of biggest benefits is that no down payment is needed to purchase a home. This can make home ownership a reality for active military or veterans who might otherwise not be able to afford it.

FHA Home Loans are mortgages insured by the Federal Housing Administration, they feature generous underwriting standards and better rates than conventional loans, along with lower required minimum down payments (only 3.5%).  Additionally, FHA borrowers are required to pay for mortgage insurance (MIP) to protect the lender in the event of a default.

The FHA HECM (Home Equity Conversion Mortgage – Reverse Mortgage) is for borrowers 62 or older and want money to pay off your mortgage, supplement their income, or pay for healthcare expenses. It is a type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage (principal or interest) is required until the borrower dies or the home is sold. After accounting for the initial mortgage amount, the rate at which interest accrues, the length of the loan and rate of home price appreciation, the transaction is structured so that the loan amount will not exceed the value of the home over the life of the loan. Meaning, it is a non-recourse loan so you can never owe more than the home is worth. This loan was restructured by the FHA in 2014 with better safeguards for the borrower and non-borrowing spouse. It also allows you to tap into any equity increase in the future when you choose certain HECM loan options.

The USDA Single Family Housing Guaranteed Loan Program assists approved lenders  like Directors Financial Group in providing low and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may build, rehabilitate, improve or relocate a dwelling in an eligible rural area. The program provides a 90% loan note guarantee to approved lenders.

Within each of these loan types there is also a number of loan term options that can be applied.

Fixed Rate

With a fixed-rate home loan, your interest rate remains the same for the life of the loan and the payment is split into equal monthly payments for the duration.

During the first few years, only a small portion of the payment pays off principal. Most goes to pay off interest.

Fixed-rate home loans can be 10, 15, 20, 25, and 30 years. The most popular term is the 30-year because that makes the monthly payment the lowest.

Adjustable

Unlike a fixed-rate home loan, which sports an unchanging interest rate over the life of the loan, the interest rate on an adjustable-rate mortgage, or ARM, can change from year to year. However, all adjustable-rate mortgages have a maximum interest rate that can be charged.

Directors Financial Group NMLS# 177087
11 Cushing, Ste 250, Irvine, CA  92618
Toll Free:  (877) 492-9173
services@dfg1.com
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