Types Of Loans

The process of getting a loan can be very complex. For starters, there are several different programs to apply for and some have very specific requirements. Loans and mortgages all require that you have a handle on your finances, or at least have a good understanding of what your financial landscape looks like.

Below you’ll find some of the most common types of loans that are given to home buyers in the Lake Tahoe area.

Adjustable Rate Mortgage

Adjustable rate mortgages are mortgages in which the interest rate is periodically adjusted to reflect the current market conditions. These mortgages can help to save you money in the short term, however, they can be more difficult to predict as time goes on.

Balloon Payment Loan

This style of loan is a fixed rate loan that is amortized over 30 years but becomes due and payable at the end of a certain term. May be extended or may roll-over into another type of loan. Usually, at the end of this loan’s terms there is a larger than average payment due.

Buydown Loan

Buydown loans are essentially a style of mortgage loan where the buyer can receive a lower interest rate for the first years of the mortgage. Typically, this is done for about one to five years.

Community Home Buyers Program

Usually, community home buyers programs are geared towards first time home buyers, and will help them secure a home for a much lower downpayment than normally needed. These programs usually have no cash reserve requirements and are much easier to qualify for.

Conventional Loan

Conventional loans are usually much more lenient to receive and are based upon the worth and condition of the property. This type of loan is most commonly associated with buying a “fixer upper.”

FHA Loan

FHA loans are distributed and issued by the federal government. They are much easier to qualify for than typical loans and have a low downpayment compared to conventional loans.

Fixed Rate Loan

Fixed rate loans have a single interest rate that remains the same throughout the entire life of the loan.

Graduated Payment Mortgage

Essentially, a graduated payment mortgage starts with payments lower than a typical fixed rate loan, and increase at a fixed rate for a determined number of years. Typically, these loans are helpful if you don’t have a lot of money to invest up front, but are expecting an increase in the following years.

Mortgage Credit Certificate

Mortgage credit certificates are similar in nature to other first time home buyer programs, as they’re based upon the purchase price of your home and the level of income you’re currently making. These certificates are tax credits that can help a buyer qualify for certain loan programs.

Non-Qualifying Loan

Non-Qualifying loans can take on many forms. Essentially, this style of loan doesn’t require any documentation, and is very easy to qualify for since there aren’t really any requirements. Usually, when going through the non-qualifying loan process your qualification for other loan programs will be checked.

VA Loan

VA loans are loans for those who are military veterans. To be considered a veteran you must have served 180 days of active service. The maximum VA loan is currently $203,000 with no down payment.

Overall, the type of loan you’ll choose will depend upon your level of income and total of other assets. When deciding what type of loan will help you secure your Tahoe dream home it can be very helpful to consult with a real estate professional.