Member:
Executives Association of San Diego
Licensed by the CA Dept of Real Estate #01090117
Conventional loans are generally sold to the Federal National Mortgage Corporation (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). The maximum loan currently available is $417,000 (higher loans are available for duplexes, triplexes and four-plexes). The most common types of loans are the following.
The US Government has authorized FNMA and FHLMC to temporarily buy loans (in San Diego) up to $697,500. These higher loan amounts have many restrictions that ordinary loans do not have. Call for details.
Fixed 30, 20 and 15 year loans: The lender takes the risk that rates go up. If rates go down, you refinance.
Adjustable Loans: You take the risk that rates will go up. If rates go up, you are stuck. If rates go down, you benefit.
Delayed initial adjustment loans: The bank takes the risk for the first several years (3,5,7,10 years) then you take risk for the remainder of the loan. This can be a great strategy if you are willing to take some risk or if you plan to sell your home at a specific point in the future.
Fixed rate balloon (5/25 or 7/23) with one reset option at either 5 or 7 years. the bank takes the risk until the reset option, at option time you take the risk on the change date, then your rate is fixed again for the balance of the 30 year loan and the risk shifts back to the lender.