New York Mortgage Loan Types

Fixed-Rate New York Mortgage Loans

If you plan to stay in your house for a long time, your New York mortgage loan rate is probably a big concern. Because your interest rate stays the same throughout the entire life of your New York mortgage loan, a fixed-rate loan ensures that there are no surprises. Fixed-rate mortgages are available in a variety of repayment terms, with 15, 20, and 30 years the most common.

• 30-Year Fixed-Rate Mew York Mortgage Loans

With the 30-year fixed-rate you will be able to keep your payments down by making them over an extended time period of 30 years. This New York mortgage loan is the easiest fixed-rate to qualify for and provides the maximum interest deduction for taxes. If you are planning to stay in your home for a long time & would like to have the extra money for other purposes, this type of New York mortgage loan is your best bet.

• 20-Year Fixed-Rate New York Mortgage Loans

The benefit to the 20-year fixed-rate over the 30-year is that not only do you become debt-free 10 years sooner, but the New York mortgage loan interest rate is often much lower. This mortgage amortizes principal and interest over 20 years & may save a considerable amount of total interest in the long run, but the monthly payments will overall be much higher than the 30-year fixed-rate.

• 15-Year Fixed-Rate New York Mortgage Loans

The 15-year fixed New York mortgage loan rate has the lowest interest out of the fixed-rates and will save you a significant amount of interest. Since you would be paying off the mortgage quicker than the other fixed-rate loans, you will build up equity in your home a lot sooner. This is an ideal New York mortgage loan for someone who is approaching other big expenses such as college tuition for their kids or their own retirement.

Adjustable-Rate New York Mortgage Loans

With an adjustable-rate loan (ARM), the interest rate adjusts periodically as the market rates change. This means that your monthly interest rate could go up or down depending on the market. These New York mortgage loans are attractive to consumers because they usually offer a lower initial interest rate than a fixed-rate loan. The other benefit to this is that many people qualify for larger loans due to this initially lower rate. The downside is that the rate can increase by quite a bit and some people can’t handle the instability.

Who should consider an ARM?
• Those who are confident that their income will rise enough in the upcoming years to support an increase in interest rate.
• Thos who plan to move in the next few years and therefore aren’t concerned with an increase.
• Those who you need a lower initial rate to afford to buy the home you want.

Please note: There are “caps” or limits to the amount that your interest rate can increase. Each loan has two caps. One sets the most your interest rate can increase during each adjustment period and the other cap sets the absolute maximum amount of all interest rate adjustments throughout the life of the loan. These caps depend on the terms of your loan. Make sure that you can afford the payment when rates are at the highest cap mark before accepting the loan.
Government Loans

The following are three agencies that offer government-insured loans. The properties being purchased must meet certain standards to apply.
• Federal Housing Administration (FHA) Loans

An FHA loan allows you to put down a very low down payment on your home. (from 3-5% depending on the FHA appraisal value.) The maximum loan limit is based on the average cost of living in your area.
• U.S. Department of Veterans Affairs (VA) Loans

The VA loan allows qualified military veterans to buy a house under $203,00 with no down payment.
• Rural Housing Services (RHS)

The RHS offers low interest rate loans with no down payment to people with low to moderate income households who live in rural areas or small towns.
• State and Local Loan Programs

Many states and local housing agencies offer special programs for first-time home buyers. These programs typically offer mortgages with low down payments or lowered interest rates with specified income guidelines for first-time home buyers. Some of these agencies offer assistance with down payments and closing cost. Check with your local state housing authority for more information.
Balloon Loans from New York Mortgage Lenders

Balloon loans are attractive because they offer a lower interest rate for a short term financing period. (usually 5, 7 or 10 years) At the end of the term you will be required to either pay off the outstanding balance in one lump sum or you can refinance the loan. If you choose to get a balloon loan, make sure that you know all the conditions that apply for refinancing. Most people who chose to get a balloon loan plan to sell or refinance their New York home within a few years and want a fixed, low payment. If you don’t think you can meet the refinancing conditions or you think the balloon term may be up before you are ready to move, this is probably not the type of New York mortgage loan for you.
Affordable Housing Mortgage Loans

These New York mortgage loans are for households of low to modest means. For qualifying families, Fannie Mae, in cooperation with housing providers, can help with high down payments, closing costs & housing expenses by offering flexible underwriting ratios that allow you to use more of your monthly income toward housing costs. These loans require a smaller down payment and a lower closing cost than normal mortgage loans. Generally, you are eligible if your household income is no more than 100% of your area median income.
• Fannie Mae’s Community Home Buyer’s Program ®

This program offers financing to low and moderate income home buyers with good credit but who may not qualify for home financing based on traditional lending criteria.
• 3/2 Option ®

This option makes it easier to accumulate funds for your down payment by offering a 3% down payment instead of 5% that is usually required. The remaining 2% can be supplied by a relative and/or nonprofit organization, state, federal or local government program.
• Fannie 97 ®

This type of New York mortgage loan is ideal for someone who has enough money for their monthly mortgage payments but doesn’t have immediate access to cash for the down payment. It offers a 3% down payment and is available with either a 25-year or 30-year term. Closing costs can be supplied by a relative and/or nonprofit organization, state, federal or local government program.
• FannieNeighbors ®

FannieNeighbors removes the income limit if you are purchasing a home within a designated central city or eligible census tract.

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