Whether you are ready to purchase, or refinance, the Loan Advisors at American Pacific Mortgage will help you choose the mortgage option t that meets your financial circumstances.
Discover the difference between Fixed or Adjustable, Jumbo or Conforming and other loan types below.
We provide the options - you get the loan!
A fixed rate mortgage is the most popular loan program chosen by homeowners. If you are one of the many homeowners who desires a stable monthly interest rate and payment over the life of your loan, then a fixed rate could be the loan for you.
With a fixed rate loan, it doesn’t matter what is happening in the market. If interest rates begin fluctuating wildly, your rates will remain steady and sure. Nobody knows what the future holds, but with a fixed rate mortgage you can have the peace of mind that nothing will cause your rates and payments to rise.
Your financial planning is made easier when you know what your mortgage payments will look like for the next 15 or 30 years. Set and reach short-term and long-term financial goals by knowing your interest rates will never go up, and neither will your payments. With a fixed rate mortgage, your principal and interest payment is set in stone. While your property taxes and homeowner’s insurance may change throughout the years, your principal and interest payments will be reliable and consistent.
Choose a fixed rate term that works for your financial goals. You have the freedom to select various fixed rate loan options. If you choose, you can make higher monthly payments and reduce the amount of time it will take to pay down your principal or pay off your mortgage before the end of your fixed term.
30 Year Fixed*
A 30-year fixed is a great option when you want peace of mind of stable monthly payments to reach your long-term financial goals.
15 Year Fixed*
A 15-year fixed is a terrific option when you prefer a higher monthly payment in exchange for paying less in interest, want to pay your house off sooner, or when you have short-term plans for your home.
An Adjustable Rate Mortgage, or ARM, can be a powerful tool for homeowners. An ARM is a mortgage that offers a low introductory fixed rate term. After this period is over, the adjustable period follows for the remainder of the term. During this adjustment period the interest rates can adjust up or down, depending on the financial index it is attached to.
During the initial fixed period, the interest rates on an ARM are generally lower than with a fixed term loan. This means lower monthly payments for the introductory term. If you plan on selling or refinancing your home in 5-7 years, the ARM is a great option for lowering your rate and payments during that introductory fixed period.
Lenders are able to offer lower interest rates on an ARM because they only have to guarantee that rate for the introductory fixed period. Luckily, the average American refinances or moves every 5-7 years, which just happens to be the same fixed period on an ARM.
For that period of time, you can benefit from lower interest rates and monthly payments compared to a fixed-rate mortgage.
What happens if you don’t refinance or move in the next 5- 7 years, and you reach the end of your ARM fixed term? When an ARM adjusts, the interest rates may be higher or lower than they are when you first get the loan. There is a risk of your interest rate and payments adjusting up. If your ARM does adjust up, a cap will limit the amount that the loan can go up annually and over its lifetime. You will be able to anticipate a worst-case scenario and know exactly how far up your interest rate can change that year and beyond.
The bottom line is that an ARM can be a powerful tool to get you a lower interest rate and monthly payments for a set period of time. This option is not right for everyone, but if you plan on moving or refinancing in the next 5 to 7 years, an ARM could be a benefit for you.
At American Pacific Mortgage, our loan advisors can help you to determine if an ARM fits your financial goals.
When the home of your dreams is in an extremely desirable higher priced real estate market, or your growing family demands a larger home, a Jumbo loan may be right for you.
Jumbo loans are also considered non-conforming loans because they exceed the conforming loan limit of $453,100. Some counties may vary in conforming loan limits, so our experienced advisors will help you decide if your loan amount fits into the limits, or if a Jumbo loan is the right option for you.
Interest rates on Jumbo loans tend to be higher, due to the increased risk associated with larger loan amounts, and because the loans cannot be sold to Freddie Mac or Fannie Mae on the secondary market. Some borrowers may choose to pay a larger down payment to get their loan size below the conforming limit. Other borrowers are comfortable paying a higher monthly payment instead of putting the additional money down. For these borrowers with higher monthly income but less available savings, a Jumbo loan is the perfect solution.
What You Need to Know
The exclusive community, the premium county, or the upgraded house to fit your growing family are all hallmarks of a Jumbo loan.
Our loan advisors at American Pacific Mortgage can help you determine if your loan amount falls outside of the conforming limits. While piggyback second mortgages and larger down payments could bring your loan amount down to conforming limits, you may choose to utilize a Jumbo loan instead. We will help you understand your options so you can decide which loan will fit your needs.
An interest only (IO) loan allows you to pay only the full monthly interest due on your loan for the fixed period of the loan. During the IO payment period, you’re required to make only the interest payments; the principal remains unchanged. When the IO period expires, you begin paying on the principal too, resulting in an increased mortgage payment.
One unique characteristic of an interest-only loan is that you may elect to make either the minimum monthly payment (the interest-only portion), or, at your discretion, additional payments to be applied to principal to reduce the principal balance. Doing so will reduce your minimum monthly payment in the following month, because the minimum payment will be recalculated based on the remaining loan principal.
This unique tool is very attractive to borrowers whose income ebbs and flows, as it maximizes cash flow between commissions or bonuses. When income periods are lower, only the interest payment is due. In those periods that your income surges, you can make additional payments towards your principal and lower your future IO payments.
How Low Can You Go?
Most lenders will allow you to pay down the principal amount of your loan during the IO period without penalty, but some lenders may have limits on the amount of principal you can pay down during this initial period. Our loan advisors at American Pacific Mortgage can help you choose the IO loan program that will best align with your principal payment plans.
An Interest Only loan is a unique program that will offer good benefits to the right borrower, but it may not be right for everyone. If paying your house off quickly is your top priority, the IO loan is not for you. Let us help you select the home loan that works for your individual home goals.
FHA loans are insured by the Federal Housing Administration, and with the government guarantee, lenders are more willing to lend with more lenient qualifying guidelines. FHA loans have been specifically designed to help borrowers get into homes.
First Time Buyers can often benefit from the more flexible guidelines of a FHA loan, including a lower down payment. Typical conventional down payments can range between 10% - 20%, but with a FHA loan the down payment can be as low as 3.5%*. This lower down payment can even be provided to you from a family member as a gift fund.
With more lenient qualifying guidelines, FHA loans make homeownership more accessible to more people. Credit scores to 600, lower debt ratios, and seller contributions are all allowed with a FHA loan. A few ups and downs in your credit history may be ok with FHA guidelines.
First Time Buyers are not the only ones who can benefit from a government guaranteed loan. You can refinance with an FHA loan, even if you don’t currently have an FHA loan. FHA loans come with a few requirements. Because the program intends to help buyers get into a home, you must live in it as your primary residence. (Don’t worry investors, we have plenty of other loan programs that are perfect for you.) Flip properties are allowed, however, as long as it is owner occupied.
Some FHA programs will require you to have the home appraised by an FHA- approved appraiser, and for you to pay mortgage insurance premiums. Plan on paying Up Front Mortgage Insurance (UFMI) and a Monthly Mortgage Insurance Premium. Our American Pacific Mortgage loan advisors can tell you what you qualify for and what to expect for your total payments, including mortgage insurance.
A VA loan is insured by the U.S. Department of Veterans Affairs and issued by VA approved lenders. This government guaranteed loan encourages these approved lenders to lend with more flexible and lenient qualifying guidelines.
VA loans offer unmatched benefits to our heroes; the veterans, active duty, and surviving spouses.
Veterans, actively serving military personnel, and surviving spouses of veterans qualify for a VA loan with suitable credit, adequate income, and a valid Certificate of Eligibility
Veterans purchasing their first homes can qualify for more home thanks to no requirement for mortgage insurance. The VA does not require a down payment, and homebuyers can even purchase a home that needs repairs or remodeling and include the costs of those repairs into the VA loan, up to 103.15%.
The VA offers a Streamlined Refinance to lower the interest rates of many veterans without having to re-qualify. The VA mortgage is an incredible program that honors our heroes. The amazing benefits to buyers or borrowers cannot be matched by any other loan program. Purchase a home with no money down, borrow 100% of the value of the home or more, qualify with lenient guidelines, and avoid mortgage insurance requirements with a VA loan.
Not sure if you qualify? Want to compare a VA loan to other programs to be sure you are getting the perfect loan? Our loan advisors at American Pacific Mortgage can go over the VA guidelines so you can rest easy knowing that the VA loan is a superior program established in recognition of you.
* Qualifying factors may apply
USDA loans are government insured loans for purchasing rural property outside of major metropolitan areas. USDA loans are serviced by direct lenders that meet federal guidelines. USDA loans offer unique benefits, including no down payment requirements for buyers.
If you live outside of a major metropolitan area, then you may qualify for a USDA loan. As a matter of fact, millions of borrowers are eligible for USDA loan, the only program that offers 100% financing available* to buyers who haven’t served in the military. The county and zip code of the home you want to purchase may meet the guidelines as long as it is outside of a major metropolitan area.
Conventional loan can require a 20% down payment, but USDA loans stand alone in offering 100% purchase financing with no down payment requirements. As long as you meet the USDA requirements, you can get 100% financing when you purchase your rural home.
The requirements for a USDA loan are very specific, so our specialized loan experts at American Pacific Mortgage can help determine if you qualify under the current guidelines. The location of the home, your income, credit history, and number of dependents will determine eligibility for this fantastic program.
* Qualifying factors may apply
If you are 62 or older and own your home, you are uniquely qualified to benefit from a reverse mortgage. This loan program is designed to help qualifying borrowers get access to their equity, stay in their home, and potentially rid themselves of a monthly mortgage payment.*
A reverse mortgage gives you access to the equity that you have built up in your home over the years through principal payments, your down payment, and appreciation. You can receive this equity to use however you want.
With a traditional mortgage, you pay a monthly payment to a lender. With a reverse mortgage, the payment is made to you. How would you like to receive your equity?
You can choose these, or any combination, when you receive your equity from a reverse mortgage.
With a reverse mortgage, you defer monthly payments on your mortgage. The amount owed then becomes a lien on the property. Any equity that you choose to have paid to you is added to that lien amount, with any interest accrued.
At the end of the reverse mortgage period, when you no longer occupy the home, the amount owed is either the mortgage balance or the value of the home, whichever is lesser.
A reverse mortgage can be a powerful tool to give you access to the equity that you have built up in your home over the years. It is not right for everyone, and if your financial goals include paying your mortgage off faster, than a reverse mortgage may not be for you. However, if you have built up equity over the years and you want to get cash from your home or defer monthly mortgage payments, then a reverse mortgage may be excellent program to consider.
Our loan advisors at American Pacific Mortgage can sit down and listen to what goals you want to accomplish and help you to determine if a reverse mortgage is a good option for you. Our trusted advisiors will help you understand your options, and give you all of the information to see if a reverse mortgage is the program for you.
*Borrowers will still be responsible for tax, insurance and maintenance of the property. Must be primary residence. All Borrowers must be 62 or older.