LOAN PROGRAMS
Prime Financial offers the following types of loans:
       • Purchase - new or existing construction
       • Construction to permanent financing
       • Refinance
       • Small commercial loans

Listing and explaining every single loan program would be pointless (and long!). This is why we say, "use your brain… use your broker."  Prime Financial listens to you! You tell us what you're trying to accomplish, and we find the exact loan product that meets your needs.

That said, there are some things everyone should know about the 4 basic real estate loan categories. Remember that within each category there are numerous variations.

Fixed Rate Loans: As the name indicates, the interest rate is fixed for the entire duration of the loan - 15, 20, 30, or 40 years. Some loans allow for “interest only” payments usually during the first 10 years of the loan. Loan amounts up to a fixed maximum cutoff value are considered conventional loans, while those greater than that amount are "jumbo" loans. That cutoff value varies over time and across specific lender programs.

Adjustable Rate Mortgages (ARM): ARM loans have a lower starting interest rate than fixed rate loans. All ARMs are 30-year or 40-year amortized loans, but the rate adjusts (changes) at varying intervals for the duration of the loan.” Both conventional and jumbo ARMS are available in many different types. A monthly or 6-month ARM adjusts the rate monthly or every 6 months for the duration of the loan. If you choose a 1, 3, 5, 7, or 10 year ARM, the rate is fixed for 1, 3, 5, 7, or 10 years, and adjusts annually or semi-anually after that initial period. All ARMs are tied to both a fixed margin as well as a varying index such as the London Interbank Offered Rate (LIBOR) or Monthly Treasury Average (MTA), which is how adjustments are determined. Other ARM products of different configurations, some with “interest only” payments, are also available. Prime Financial will help you decide if an ARM is in your best interest, and if so, which kind is most advantageous for you.

Payment Choice ARM loans (also called Hybrid ARM’s) allow Borrowers the flexibility to choose a payment based on their monthly cash flow situation. With this type of loan, you typically have a choice of three different payments you can make on a monthly basis:

• A minimum payment based on a very low interest rate (such as 1%) where negative amortization can and will accrue
• An interest-only payment
• A fully amortizing payment (principal and interest)

 These Option ARM loans will usually allow up to 110% of the original loan amount in negative amortization before re-calculating (“recasting”) into fully amortizing loans.

2nd Mortgage/HELOC (Home Equity Line of Credit): These loans are in 2nd position behind a 1st mortgage. In some cases, we might combine 1st and 2nd mortgages on a property if the 1st mortgage exceeds 80% of the property's value in order to avoid the extra expense of mortgage insurance. In other cases, you might use a 2nd mortgage to take out cash from the equity in your home for various reasons - pay off debt, remodel, buy a car, vacation, etc. Seconds are available in 2 forms:
           • ARM tied to the prime interest rate
            • Fixed rate 15-year or 30-year amortized due in 15 years.

‡Please Note: Income verification can vary within all of the above programs, from full documentation to light documentation to no income or asset verification at all. Interest rates are directly related to your credit score, and the type of income documentation your loan requires.