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Loan Programs
Fixed Rate Mortgage – Available in a 10, 15, 20 or 30 year, this program is fully amortizing which means that the loan payments are based on paying the mortgage off during the term of the loan (i.e., a 10 year mortgage will be paid off in 10 years). The monthly principal and interest payments remain the same for the life of the loan. The maximum loan amount is $417,000 (as of 1/1/2007).
Adjustable Rate Mortgage (ARM) – Available in a 1/1, 2/1, 3/1, 5/1, 7/1 and 10/1, this program’s rate and payment can adjust after the year indicated by the first number (i.e., a 1/1 mortgage can adjust after one year, a 3/1 mortgage can adjust after the first 3 years). After the initial adjustment, the rate and payment can then adjust every six months or one year depending on the term outlined in your mortgage note. In addition, a typical Adjustable Rate Mortgage will have a “lifetime cap” or maximum rate over the lifetime of the loan.
Balloon Mortgage – A fixed rate, level payment mortgage that is amortized over a certain period (usually 30 years), but which has a balloon term (when the balance comes due). The balance can be refinanced with certain conditions or can be paid off in full at that time.
Construction Mortgage – A short term mortgage, this program provides financing for the building or substantial remodeling of a home. Borrower is approved for an amount based upon contractor bids and final appraised value of the home. During the construction period, the lender “holds” the funds and disperses them to the contractor as the work is completed. Terms of construction loans are typically 6 months, 9 months or 12 months as dictated by the contractor and the borrower for the amount of time it will take to complete the construction of the home. Payments are based on the amount of funds used and are typically interest only payments. Upon completion of the home, the construction loan needs to be refinanced into a permanent type mortgage.
WHEDA Mortgage – Offered and administered by the Wisconsin Housing and Economic Development Authority, these programs provide fixed rate mortgage financing to first-time homebuyers at interest rates lower than conventional rates. Can allow for closing costs to be rolled into the loan. May require mortgage insurance. Some income restrictions apply.
Rural Development Mortgage – This program provides 100% financing with 30 year fixed rates that are comparable to conventional rates. Program does not require mortgage insurance and can allow for closing costs to be rolled into the loan amount. Some property and income restrictions apply.
VA Mortgage – This program is offered to active or inactive members of the military. The Federal VA program allows for 100% financing at an adjustable rate or fixed rate that is comparable to conventional rates. The State VA program requires a 5% down payment with rates being set by the State. Some property restrictions apply.
100% FNMA/FHLMC Mortgage – These mortgage programs provide for 100% financing with mortgage insurance. Both Fannie Mae and Freddie Mac provide different loan programs developed for those buyers who don’t have a down payment and traditionally wouldn’t qualify for conventional mortgage programs. Programs do require mortgage insurance. Interest rate and mortgage insurance are based on borrower's credit.
80/20 Piggy-Back Mortgage – (DUE TO CURRENT MARKET CONDITIONS, THIS PROGRAM HAS BEEN SUSPENDED) This program offer an alternative to 100% financing by utilizing two loans instead of one loan to finance a home at a 100%. This program provides 80% of the purchase price under one loan and 20% of the purchase price under another loan and thus avoids having to pay mortgage insurance. Fixed or adjustable rates are available.
Home Equity Line of Credit – Commonly referred to as a HELOC, most home equity lines of credit are used as a second mortgage but are also available as a first mortgage. This program allows homeowners to tap into the equity established in their home, while providing a maximum amount of flexibility. Interest rates are typically based upon the Prime Rate and will change as the Prime Rate changes. Borrowers are approved for a maximum amount and can access funds via a checkbook or debit card. Interest accrues on the mortgage only as funds are utilized. Payments are based on the amount used and the current interest rate. Most home equity lines of credit offer an interest only payment option for a certain number of years. Some programs allow for a borrower to “lock in” a rate as funds are used in order to avoid fluctuation of the Prime Rate.
Fixed Rate Second Mortgage – Similar to home equity lines of credit, this program allows for homeowners to tap into the equity of their home. However, this program does not allow the flexibility of the HELOC. Fixed and variable rates are available with full amortization over the life of the loan or an optional balloon payment.
