Types of Loans
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A second mortgage is a lien that holds a subordinate position to the first. Before the holder of this lien receives any proceeds.
A second mortgage is a lien on a property which is subordinate to a more senior mortgage or loan. Called lien holders positioning, the second mortgage falls behind the first mortgage.
An FHA loan is a mortgage issued by an FHA-approved lender and insured by the Federal Housing Administration (FHA). Designed for low-to-moderate income borrowers. What is an FHA loan? An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, or FHA. Popular with first-time homebuyers, FHA home loans require lower minimum credit scores and down payments than many conventional loans.
Loan modification is a change made to the terms of an existing loan by a lender as a result of a borrower’s long-term inability to repay the loan.
BREAKING DOWN Loan Modification
Loan modifications may occur with all types of loans however they are most common in secured loans. Leander’s may agree to a loan modification through a settlement procedure or in the case of a potential foreclosure. In these situations a lender typically believes that the loan modification will provide substantial savings in comparison to a charge off alternative.
A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.
A short sale has two intrinsic and inseverable components. A Short Sale is successful when a lienholder(s) (a.k.a. Mortgage Company) is agreeable to net less than the amount owed on the note (debt) as the result of an arm’s length sale at or below the Appraised Value for that property. The agreeable selling price is intrinsically defined to be at or less than the appraised value allowing the process to be attainable. A prudent buyer will not pay greater than the appraised value, and a Bank or Finance company will not provide a mortgage for greater than the appraised value, thus limiting the Short Sale proceeds to a maximum gross yield of the property’s Appraised Value. A short sale may occur when the lienholder expects that a mortgage will likely never be repaid and the home’s value (due to the home’s condition, such as if a prior homeowner vacated the property and left it damaged or trashed, or general economic conditions in the area or nationwide) will not (either quickly or at all) regain equity to allow full payment of the mortgage.
A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conform to the requirements by Fannie Mae and Freddie Mac. A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government.
HARD MONEY LOANS
A hard money loans is a loan of “last resort” or a short-term bridge loan. Hard money loans are backed by the value of the property. A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans, starting at 7.7% – because of the higher risk and shorter duration of the loan.
A jumbo loan is a form of home financing for whose amount exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA).
Home prices have shot up in some areas of the U.S. to the point where buyers need jumbo loans to finance them. In mortgage speak, jumbo refers to loans that exceed the limits set by the government-sponsored enterprises that buy most home loans and package them for investors.
Jumbo mortgages, or jumbo loans, are those that exceed the dollar amount loan-servicing limits put in place by GSE’s Freddie Mac and Fannie Mae.
Many mortgage borrowers who could not qualify for a mortgage before due to the strict lending guidelines on government and conventional loan programs. Ten years has passed since the housing crisis hit the economy in 2008, and Non-Qualified correspondent mortgages are finally making a comeback. Industry experts are predicting Non-QM loans could grow to $5 billion in 2018, up sharply since 2014 when the market started to recover.
What is a VA Loan? The VA Loan became known in 1944 through the original Servicemen’s Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment.