Jumbo Financing Options

If you have a higher property value and can manage larger monthly mortgage payments, consider a jumbo, or non-conforming loan.  A jumbo loan provides financing for loan amounts higher than the maximum conforming limits set by Fannie Mae and Freddie Mac.  A conforming first mortgage plus a home equity line of credit may provide greater payment flexibility.  Both are available for purchase and refinance loans (including cash-out refinances).

Features

A “non-conforming” loan with mortgage amounts above the maximum conforming loan limits (currently $417,000).

Available in a variety of fixed rate and adjustable rate loan options.

Benefits

  • Obtain financing for loan amounts higher than the Fannie Mae and Freddie Mac conforming limits.
  • Get the convenience of one loan for the entire loan amount.
  • Choose from a variety of loan options.

Considerations

You build equity at a slower pace because payments during the first several years go largely toward interest rather than the principal balance.

Mortgage + Home Equity Line of Credit Financing

This loan pairs a “conforming” first mortgage with a home equity line of credit.

The first mortgage is available in a variety of variety of fixed rate and adjustable rate loan options – the home equity line of credit has a variable interest rate.

Benefits

  • Have ongoing access to your available equity without reapplying.
  • Choose whether your line of credit balance will be charge a variable – or a fixed-interest rate options.

Considerations

  • You will have to make two separate monthly payments.
  • If you choose a variable interest rate for your line of credit balance, your monthly payments may increase or decrease as interest rates fluctuate.  You can cover any or all of your outstanding variable-rate line of-credit balance to a fixed-rate advance with a term of 1 to 25 years.

Renovation Loans

Features

  • One loan to purchase a home and make renovations or repairs.
  • Conventional or FHA 203(k) loan options.
  • Available with a fixed- or adjustable-rate.
  • Includes single-family, one-to-four units, planned unit developments and condominiums.

Benefits

  • Finance renovation costs.  Loan amount is based on the home value after improvements are made.
  • Lower monthly payments.  Costs are spread throughout the term of the loan, so your monthly payments may be lower than other financing options.
  • More choices.  Look at properties you wouldn’t otherwise consider.
  • Speed.  Start improvements right after closing. (Restrictions apply).
  • Tax deductibility.  Interest may be tax deductible. (Consult your tax advisor about the deductibility of interest).

Considerations

  • Although FHA loans have the benefit of a low down payments, in many instances, FHA may be a more expensive financing option and should be considered after thoroughly evaluating all other product options that meet your credit qualifying and financial needs.
  • Financing may not be available for luxury items, such as a pool, hot tub or spa with all programs.
  • Requires hiring a contractor.

New Construction Financing

What is the process for financing a newly built home?

Generally, there are six steps for financing a new home from a builder or developer.

1. Initial Stage
Now is the time to discuss your financing.  You can start by getting pre-qualified, which provides a rough idea of how much you may be able to borrow based on basic financial data you provide.  You can also request a preapproval letter, which tells the builder you’re preapproved for a specific loan amount based on a preliminary credit review.

2. Application
When you’re ready to sign a purchase contract, we’ll help you complete mortgage application and provide options to protect your loan from interest rates changes during construction.

3. Approvals
We’ll work with you during the loan approval process so you can enjoy seeing your home being built.

4. Exercise Rate-drop Options
During construction, extended lock programs may help protect against interest-rate fluctuations.  If interest rates decline, you can exercise a one-time option to obtain a new loan pricing, subject to approval.  We’ll remain in touch to discuss your choices and answer questions.

5. Complete Construction
In many counties, a final inspection determines that everything is ready so that you or your builder can get a Certificate of Occupancy (or its equivalent) from your local authorities.

6. Move In
Your construction and financing are now complete.  Congratulations and best wishes on your new home!

First Time Home Buyer Loans

Contact Delmar Financial to find out if you qualify for any first time home buyer loans.

Reverse Mortgages

What is a Reverse Mortgage?

A reverse mortgage is a loan available to homeowners who are 62 years or older that enables them to convert part of the equity in their home into cash.

The product was conceived as a means to help retirees with limited income use the accumulated wealth in their homes to cover basic monthly living expenses and pay for health care.  However, there is no restriction for how reverse mortgages proceeds can be used.

The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed.  Instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower.

You are not required to pay back the loan until the home is sold or otherwise vacated.  As long as you live in the home, you are not required to make any monthly payments towards the loan balance, but you must remain current on your property taxes, homeowners insurance and condominium fees (if you live in a condo).

Borrower Requirements and Responsibilities

  • Age qualification:  All borrowers listed on title must be 62 years old.
  • Primary lien:  A reverse mortgage must be the primary lien on the home.  Any existing mortgage must be paid off using the proceeds from the reverse mortgage  (Reverse mortgage proceeds can be used).
  • Occupancy requirements:  The property used as collateral for the reverse mortgage must be the primary residence.  Vacation homes and investor properties do not qualify.
  • Taxes and Insurance:  You must remain current on your real estate taxes, homeowners insurance, and other mandatory obligations, including condominium fees, or you are susceptible to default.
  • Property Condition:  You are responsible for completing  mandatory repairs and maintaining the condition of the property.

Conveyance of the mortgaged property by will or operation of law to the estate or heir after mortgagor’s death: When a reverse mortgage becomes due and payable as a result of the borrower’s death and the property is conveyed by will or operation of law to the estate or heirs (including a surviving spouse who is not on the title and therefore not obligated on the HECM note) that party (or parties if multiple heirs) may satisfy the HECM debt by paying the lesser of the mortgage balance or 95% of the current appraised value of the property.

Features of Reverse Mortgages

With a reverse mortgage, you always retain title or ownership of the home.  The lender never, at any point, owns the home even after the last surviving spouse permanently vacates the property.

The amount of funds that a person is eligible for depends on his age (or, in the case of couples the age of the younger spouse), the value of the home, the interest rate and upfront costs.  The older you are, the more proceeds you may receive.

There is a limit on the amount of funds you can access during the initial year.  If you are eligible for a $100,00 loan, for example, you can take $60,000, or 60 percent of that sum.  There are exceptions.  You can withdraw a bit more if you have an existing mortgage, or other liens on the property, that exceed the 60 percent limit.  You must pay off these “mandatory obligations” as the government calls them, before qualifying for the reverse mortgage.  You can withdraw enough to pay off these obligations, plus another 10 percent of the maximum allowable amount- in which case that’s an $10,000, or 10 percent of $100,000.

Loan proceeds can be taken as a lump sum, as a line of credit or as fixed monthly payments, either for a fixed amount of time or for as long as you remain in the home.  You can also combine these options, for example, taking part of the proceeds as a lump sum and leaving the balance in a line of credit.

Fees can be paid out of the loan proceeds.  This means you incur very little out-of-pocket expense to get a reverse mortgage.  Your only out-of-pocket expense is the appraisal fee and maybe a charge for counseling depending on the counseling organization you work with.  Together, these two fees will total a few hundred dollars.  Very low-income homeowners are exempted from being charged for counseling.

When you ultimately pay off the loan, the final balance equals the amount of funds borrowed, plus annual mortgage insurance premiums, servicing fees and interest.  The loan balance grows as you live in the home.  In other words, when you sell or leave the house, you owe more than you originally borrowed.  Look at it this way: A traditional mortgage is a balloon full of air that loses some air and gets smaller each time you make a payment.  A reverse mortgage is an empty balloon that grows larger as time passes.

To learn more about our current loan programs click here.

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