Loan Programs

So you’ve found that perfect home. Your mind has already arranged the furniture, and the paint chips are practically picked out. Now let MBank help you get the key to the front door. We’ll get you just the right mortgage, whether you want to put a 30-year loan to the test, or just settle in for a few. Take a look at these options we offer for first mortgages.

Fixed Rate Loans - The interest rate and payment remain the same over the term of the loan. Loans can be amortized over the following terms: 10, 15, 20, 25, 30, and 40 years. The advantage of a fixed rate program is that it allows you to get a fixed rate, over a specified period, without being concerned about market fluctuations. This type of financing is recommended for borrowers who intend to stay in their house for a long period of time. This type of loan is available for good credit and credit challenged applicants.

Fixed Rate Balloons - Both interest rate and payment remain the same until the loan is due. Typically, the entire loan amount is due in either 3, 5, or 7 years. The advantage of balloon programs is that they tend to have the lowest rates, due to the fact that the entire balance must be paid off or refinanced at the end of the term. This type of financing is recommended for borrowers who know they will be leaving their current house in either 3, 5, or 7 years. This type of loan is available for good credit and credit challenged applicants.

Adjustable Rate Mortgage (ARM) - Both interest rate and payment remain the same for a fixed time period, usually 1, 3, 5, 7, or 10 years. At the end of that period the rate can rise at fixed intervals. The amount the rate can rise, or margin, is predetermined (normally ½% to 2% per rise). The intervals are normally 1, 3, 6, or 12 months. Typically there is a cap on the margin, which determines the highest the rate could ever go. The advantage of an ARM is that it allows you to get a lower rate, for a known period of time, while you watch the market to see if and when fixed rates get better. Some feel that although they may have gotten a better rate with a balloon, an ARM will adjust at the end of the “fixed period”, whereas a “Balloon” has to be refinanced or paid in full. ARMs are recommended for those borrowers who intend to stay in their house for a fixed period and have taken the time to factor in the margin, to determine that they would not be better off with a Fixed Balloon or even a Fixed Rate. This type of loan is available for good credit and credit challenged applicants.

Loan Types Conforming - Conforming loans refer to loan amounts that conform to government service standards as determined by Fannie Mae & Freddie Mac (the original government agencies, set up in the early 1940’s, established to help people finance new homes). Conforming loans range in amount from $1 to $417,000. Although not all conforming loans are serviced by these government agencies, the mortgage industry has adopted the term to express loan amounts in this range. These are for clients with very good credit only, as they must conform to strict guidelines.

Jumbo (Non-Conforming) - Jumbo loans refer to those loan amounts outside of the “conforming” range or, above $417,000. This type of loan is available for good credit and credit challenged applicants.

Properties (Non-Owner Occupied) - These types of homes are normally acquired specifically for investment purposes or are owned as a result of moving to a new house without selling or being able to sell the old house. Financing for investment properties can be achieved using any of the above described programs. Typically, the rates for financing on investment properties are higher than owner occupied homes. This type of loan is available for good credit and credit challenged applicants.

Purchases - All of the above described programs can be used in the financing of a new house. It is recommended that potential borrowers compare and contrast the different types of financing based upon their personal goals and financial situations. In no way are the programs described above, all of the programs offered in the mortgage industry. These descriptions are only to serve as an overview of the more popular programs offered and used. This type of loan is available for good credit and credit challenged applicants.

Cash-Out Refinances - Occasionally, when refinancing a borrower wants to “cash out” some of the equity that has been built into the loan. Under specific conditions, established by the lender, a borrower can actually receive a check for an amount of money that meets those conditions. Cashing-Out is not normally limited to any type of loan program, it can be done with most of the described programs. This type of loan is available for good credit and credit challenged applicants.