Finance information

Zero Down Loans

Zero Down loans are those that require no money down. These loans generally carry a higher interest rate and in my opinion, are very risky. These loans were a contributing factor to the Sub-Prime Loan failures in 2007. Fortunately in our market, these loans are not available.

No Income Verification Loans

For self-employed buyers and others who have a difficult time documenting income history, this loan may be for you. Generally in the New York market you will be required to put 25% down. These loans carry a slightly higher interest rate, but generally speaking, the more information you can document, the lower the interest rate. There are certain liquidity requirements typically associated with this type of program. Even so, it is one of the easiest programs for many buyers today!

FHA and VA Loans

The Federal Housing Administration (FHA), offers loans for low-to-moderate-income home buyers. FHA loans have low downpayments, which typically run around 3 percent, and have relatively easy requirements. FHA mortgages have no income restrictions and even those with lower credit scores may be considered. Past bankruptcy does not necessarily disqualify borrowers from using this program!

In addition, the Department of Veterans Affairs (VA) offers a zero-down mortgage program. To take advantage of this program, borrowers need to be among those listed as veterans and service personnel in the U.S. military. One of the biggest benefits of this program is that it eliminates the need for private mortgage insurance. Since Manhattan real estate is considered luxury property by the FHA, these loans are generally not available in our Borough.

Adjustable Rate Loans

With an Adjustable Rate Mortgage (ARM), the interest rate changes periodically, and is typically tied to an index, and payments go up or down accordingly. Generally speaking, lenders charge a lower initial interest rate for the ARM than for the fixed rate mortgage. If you are expecting interest rates to decrease in the future, or if you are trying to maximize your purchase power today knowing your income will rise in the future, then this loan may be right for you. Also used when you only expect to be in the home a short time.

Fixed Rate Loans

A loan usually with a term of 30 years where the interest rate stays the same for the life of the loan. It is by far the least risky of loans and when interest rates are low, it is the loan I recommend most highly.

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