AFN Loan Programs Lake Forest, Irvine, Mission Viejo, CA | Lender To The OC


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Loan Programs

Thirty-Year Fixed Rate Mortgage The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be 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 adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

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.

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 even for three full years or more will keep their 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 his vulnerability is significantly reduced.

Local and State Programs
MCC A Mortgage Credit Certificate entitles qualified home buyers to reduce the amount of their federal income tax liability by an amount equal to a portion of the interest paid during the year on a home mortgage. This tax credit allows the buyer to qualify more easily for a loan by increasing the effective income of the buyer.

Government Loans
USDA The Rural Housing Loan Programs, sponsored by the U.S. Department of Agriculture’s Rural Housing Service (RHS), are designed to make homeownership more affordable for borrowers in rural communities. With up to 100% financing, a Rural Housing loan is an affordable solution to help prospective homebuyers in rural areas.

FHA 203k The FHA 203k program provides a single-close loan that enables qualified borrowers to purchase a home that may need repairs or to refinance an existing home for the purpose of remodeling. The streamlined FHA 203k program allows borrowers to finance a maximum of $35,000 to make improvements. Both programs generate the necessary funds for renovation by financing the as-completed value of the home, rather than the present value.

FHA FHA loan programs offer flexible lending solutions that can help you provide competitively prices mortgages to qualified borrowers seeking a low down payment option. Designed for low-to-moderate income borrowers, including those with homes that may be located in disadvantaged neighborhoods or federal-disaster areas, FHA loans can be a viable option for first-time borrowers and for borrowers seeking to refinance.

VA The VA Loan is a program with flexible criteria designed to make homeownership more affordable for qualified U.S. veterans. With favorable terms, competitive interest rates and no monthly mortgage insurance premium, VA loans allow you to offer another option for veterans who are first-time homebuyers or who are purchasing or refinancing in a high-cost area.