Mortgages & Loans

Fannie Mae is the nickname for the Federal National Mortgage Association. It is a government-chartered, non-bank financial services company and is the nation's largest source of financing for home mortgages. It was started to make sure mortgage money is available in all areas of the country.

Freddie Mac is the nickname for The Federal Home Loan Mortgage Corp. It is a financial corporation chartered by the federal government to buy pools of mortgages from lenders and to sell securities backed by these mortgages.

Ginnie Mae is the government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). It was created by Congress in 1968 and has responsibility for the special assistance loan program known as Ginnie Mae. GMNA refers to The Government National Mortgage Association.

A Lease Purchase Option Mortgage is a financing option that allows a potential home buyer to lease a property with the option to buy in the future.
It is often constructed so the monthly rent payment covers the owner's first mortgage payment plus an additional amount as a savings deposit to accumulate cash for a down payment.
A seller may agree to a lease purchase option if the housing market is slow and stagnent and the seller is having difficulty selling the residence.

The term points refers to a one-time fee that lenders charge at the mortgage closing. Usually, the more points you pay, the lower the interest rate will be.
Generally, taxpayers who plan to own the same house for an extended period of time should consider paying more points up front to save thousands of dollars in interest payments over the term of the loan.
A point equals one percent of the mortgage loan. (1 point on a $100,000 loan is $1,000). Lending institutions charge points as a way to make a profit.
Borrowers may pay discount points to reduce the loan interest rate. Buyers are prohibited from paying points on HUD or VA guaranteed loans. On a conventional mortgage, points may be paid by either buyer or seller or split between them. Generally, points are usually tax deductible as mortgage interest on IRS Schedule A.

Lenders usually require PMI if the mortgage loan is more than 80% of the home's purchase price. If you do not have the standard 20% down payment, there are ways to avoid the PMI. Speak to your local CPA about the 80-10-10 financing plan and other strategies to avoid the PMI.

A reverse mortgage is used to convert home equity into cash. Payments take the form of a lump sum , line of credit or monthly payments over a specified number of years or over the life of the borrower. The amount being drawn is from the borrower's principal and considered tax-free and Benefits. Generally, the homeowner borrower must be age 65 or older and the residence must be close to being totally paid off.

The loan's rate is fixed for the first five years. After that, it becomes an adjustable rate mortgage, with a 30 year term.
Other variations include fixed periods of seven or 10 years before adjusting annually.
Generally, this is attractive for borrowers who expect to be in the house for a short period of time.

This mortgage is for borrowers who need 100% financing. Generally, it is for a 30 year fixed mortgage. No money down is required, but the monthly mortage payment must be deducted directly from the borrower's paycheck.