The fixed rate mortgage has been the most popular mortgage used in America for years. With a fixed rate mortgage, your interest rate remains constant for the length of your loan so monthly payments never vary.

     Many homebuyers select a fixed rate mortgage if they want the security and peace of mind of knowing that their monthly payments will not change. Tobyhanna Federal Credit Union offers various fixed rate terms of loans, including conventional and jumbo, as well as FHA, VA, and state bond programs, which require little or no down payment.

     An Adjustable Rate Mortgage (ARM) usually offers an initial lower interest rate and initial lower monthly payments than a fixed rate mortgage. However, the interest rate with an ARM may increase or decrease over the term of the mortgage.

     To protect you against rapid rate increases, most ARMs have an interest rate "cap" or "ceiling." Some ARMs have a convertible feature that allows you to convert an ARM into a fixed rate mortgage at specific time periods.

     The FHA mortgage is a great way to obtain financing, particularly if you are purchasing your first home. This type of mortgage helps you get started because is required a low down payment (as low as 3.50%), minimal credit history, and allows flexible underwriting guidelines. FHA mortgages are available in both fixed and adjustable rate programs.

     PHFA is a stable program available to First Time Homebuyers. This is a State Bond program offering low down payments and a low interest rate.

     If you are a veteran, reservist, or an unmarried surviving spouse of a veteran, you are eligible for a VA mortgage.

     The VA mortgage is a fixed rate mortgage which is an ideal way to purchase a home without a down payment. Closing costs may be reduced because the seller is allowed to pay ALL settlement costs, although rates and points are negotiable.

     Does your current home or the new one you're buying need improvements or repairs? Or, are you interested in adding an addition to your existing property. If so, then remodeling loans can assist you.

     A remodeling loan enables you to refinance both the purchase (or refinance) and repairs for the property. Remodeling loans can include repairs as well as updates and eligible improvements. Most importantly, there is only one mortgage. Remodeling loans are available in conventional and FHA mortgages with fixed and adjustable rates.

     If you currently own a home, the equity from the sale of that home will enable you to purchase a new home. However, if your present home hasn't sold prior to the closing of your new home, then a "bridge" or "swing" loan would help.

     A bridge loan provides interim financing and enables you to buy a new home before you sell your existing one by using the equity in your current home, whether or not it is sold or listed for sale. Tobyhanna Federal Credit Union will collateralize the bridge loan by recording a mortgage against this property, and full payment will be required upon its sale/closing, with an initial term of 6 months.

     Now you can build your dream home and obtain permanent mortgage financing with a construction to permanent loan. A construction to permanent loan can make your home building process simple because Tobyhanna Federal Credit Union / FHF has flexible guidelines, and there's only one closing. Plus, extended options are available just in case problems or inclement weather prolong the time it takes to build your home.

     Upon completion, the mortgage becomes a permanent 15 or 30 year fixed rate mortgage with no additional costs or closing documents. You can choose a construction term of up to 12 months and a customized draw system to fit your individual needs.

     A jumbo mortgage is a loan amount above the industry-standard definition of conventional conforming/conventional loan limits (limits set by Fannie Mae and Freddie Mac). The loan amounts reflect average loan sizes nationwide. Jumbo loan limits are reviewed annually, the single family home limit is currently $417,000 for FNMA and FMAC.

     Keep in mind the rate on a Jumbo loan may be higher than on a conforming loan.

     A piggyback mortgage involves the use of two separate mortgages in a purchase or refinances transaction (the second is referred to as a "piggy back"). It is primarily used to eliminate private mortgage insurance, but it also may lower your monthly mortgage payment. It also provides greater tax deductibility (please consult your tax advisor) and helps build equity faster in your home.

     If you have a fixed-rate mortgage at a higher interest rate, refinancing could reduce your monthly payments or the number of years to pay off your loan. If your current mortgage is at an adjustable rate, we can help you lock in a low interest fixed rate mortgage with payments that won't change for the life of the loan.

     Most refinancing fees can be included in the new mortgage (if you have enough equity in the home present value), so you will have very little out-of-pocket closing costs.

 Two Types:

     Regular Rehabilitation (203 (k))

• All features on Regular Rehab are not available or Streamlined
• $5,000 minimum repair cost threshold
• No maximum limit on repairs
• General contractor and normal architectural drawings required
• Maximum five payments total to general contractor
• FHA Inspector required for all repairs (all loan amounts)
• Must use licensed/bonded contractor (self-help discouraged)

     Streamline Rehabilitation (Streamlined 203 (k))

• No minimum required repair threshold
• $35,000 maximum limit on repairs
• No general contractor and normal architectural drawings required
• Allows for two payments per contractor
• No special FHA required inspections (under $15,000)
• Must use licensed/bonded contractor (self-help discouraged)

     Both loan types are great tools for "Real Estate Owned" and "First Time Homebuyers". Both available for purchase or refinance. Both allow for repairs to be financed. Borrower must meet FHA's minimum cash investment. Based on total of combined purchase price or appraised value plus rehabilitation costs. Requires a minimum 3.5% down payment if used for a purchase (more if sales price exceeds appraised value).

     A committed pre-approval for a loan will help you formally assess the scope of what you can purchase before you start looking at houses. You will receive a detailed consultation with one of our Mortgage Support Loan Counselors to identify your best finance options. Best of all, it is absolutely FREE!