Mortgage Types

 

Spinnaker Financial offers a variety of rural and agricultural loan programs at competitive, long-term fixed and adjustable rates. From lending programs for rural/manufactured home purchases and refinancing to agricultural loans for full and part- time commercial farms, ranches, vineyards, bare land, and more.

Eligible Properties include:

  • Parcels of land capable of producing agricultural commodities or products. Land may be improved by buildings, fixtures and equipment permanently attached. When the contributory value of the agricultural producing structures and site improvements exceeds 60% of the total appraised value of the property, the loan is to be treated as a loan on a specialized production agricultural facility.
  • No minimum or maximum acreage is required.
  • If the property is less than 5 acres, $5,000 minimum annual gross sales of agricultural products from the property must be documented.

Other restrictions apply, please contact us for more details at (805) 238-3516

A Reverse Mortgage is a type of mortgage that enables homeowners, 62 years or older, to convert some of their home equity into cash. The loan is called a reverse mortgage because the mortgage payback is reversed. Instead of making monthly payments to a lender (as with a traditional mortgage), the lender makes payments to the borrower. The borrower is not required to pay back the loan until the home is sold or otherwise vacated. A Reverse Mortgage may be right for you if:

  • You are 62 years of age or older
  • Have limited income
  • Intend to occupy the residence
  • Wish to purchase or refinance

Conventional mortgages are typically underwritten according to the guidelines set by Fannie Mae and Freddie Mac. These come in two different types: fixed-rate and variable-rate mortgages.

Fixed Rate

A fixed rate mortgage is predictable because you don’t have to worry about your interest rate or your mortgage payments being raised on you. Meaning, they are easy to budget for over the long term (usually 15 or 30 years) and are typically a great choice if you:

  • Need a predictable payment
  • Intend to keep your home for more than five years

 

Variable-rate

Variable-rate mortgages, also known as adjustable-rate mortgages (ARMs), are a bit more complicated than fixed-rate mortgages. Initially, their interest rate will usually be much lower than a fixed-rate mortgage. However, the interest rate of the mortgage will slowly change over time, and as a result, your payments may go up or down. They may be ideal for you if you:

  • Are going to own your home for less than five years.
  • Would like the lowest initial interest rate possible and are willing to possibly pay higher rates later on
  • Expect to eventually make a more money
  • Expect interest rates to decline

With a fixed mortgage rate, you never have to worry about your interest rate increasing. It allows you to budget your finances and have a set monthly amount for the life of your mortgage, typically 15 to 30 years. Fixed mortgage rates are great if:

  • You are purchasing a home for the first time
  • Want a standard set payment
  • Are in the middle of buying a house when the interest rates are very low
  • Plan on keeping your home for more than five years

Variable-rate mortgages, also known as adjustable-rate mortgages (ARMs), are a bit more complicated than fixed-rate mortgages. Initially, their interest rate will usually be much lower than a fixed-rate mortgage. However, the interest rate of the mortgage will slowly change over time, and as a result, your payments may go up or down. They may be ideal for you if you:

  • Think you will own your home for less than five years
  • Would like lowest initial interest rate possible and are willing to possibly pay higher rates down the road
  • Expect to eventually make more money
  • Expect interest rates to decline

FHA loans are mortgages that are insured by the Federal Housing Administration. The government is essentially saying it will pay the mortgage if the borrower cannot. Recently these types of loans are becoming more and more popular with people as first-time home buyers. They require less of a down payment that traditional mortgages, somewhere around 3.5% on average. Applicants typically have a higher rate of qualifying due to the FHA’s less restrictive requirements.

  • Have excellent credit but have as little as 3.5% cash to put toward a down payment
  • Have a less-than-perfect credit rating
  • Have a debt-to-income (DTI) ratio acceptable to the FHA
  • Are planning on buying a low-priced home
  • Have been given a financial gift to use toward buying a house
  • Are a first-time homebuyer

The Home Affordable Refinance Program (HARP) allows you to get a new, more affordable mortgage even if you’re underwater. Now in its second stage, HARP Phase II makes it possible for even more homeowners with Fannie Mae or Freddie Mac owned mortgages to refinance at historically low interest rates. Now homeowners who find themselves underwater; can refinance, no matter what their home is worth. Harp Phase II has also eliminated the need for a new property appraisal when a reliable Automated Valuation Model (AVM) is available.

If your mortgage is owned or guaranteed by Freddie Mac or Fannie Mae, a HARP II loan may be your opportunity to take advantage of some of the lowest interest rates ever. They may be right for you if:

  • You would like to refinance your current mortgage to get a lower-rate
  • Your mortgage is owned or guaranteed by Freddie Mac or Fannie Mae
  • You’re “underwater,” that is you owe more on your current mortgage than your house is worth

The Veterans Administration (VA) loan guarantee program was created in 1944 to help service personnel returning home from World War II obtain no-down payment home financing at reasonable interest rates.  Since that time, any veteran who has served a minimum time in active duty in a regular component of the United States Armed Forces can become eligible for VA benefits for use toward the purchase of a home.  Unmarried, surviving spouses of veterans who died as a result of service injuries are also eligible for VA financing, as are the spouses of MIAs or POWs who were on active duty and listed as missing for more than 90 days.

Like FHA, VA is not a direct lender.  It guarantees a certain portion of the loan amount to enable private lenders to make 100% loans with some protection against foreclosure loss.  A VA funding fee is paid to the Veterans Administration to help offset its costs of the loan program.

The Veteran must have proof of eligibility, which is issued by the VA in the form of a Certificate of Eligibility. There is no mortgage insurance to be paid like in other low down payment programs and no prepayment penalties for early pay-off.

The loan programs available include a fixed rate, 30 and 15 year fully amortized loans.

The United States Department of Agriculture’s (USDA) Rural Development Administration offers 30-year home loans to improve the quality of life and economy in rural areas.

Much of San Luis Obispo County counts as “rural”, defined as open country, places with population of 10,000 or less.  The program offers beneficial features such as no down payment and is not limited to first time home buyers.

Income restrictions apply, please contact us for more information on the USDA program.

Hobby Farm Loans are designed for people who wish to finance a home on a property where they can produce some income from agricultural activity such as crops, livestock, hay, alfalfa, etc.

The requirements for the property to be considered are:

  • Property must be residential in nature and a Single Family Residence only
  • Primary residence only
  • Property must be appraised as residential real estate, with commercial/agricultural value not included in the market value
  • Agricultural use should generally not exceed 20% of the total acreage
  • Other restrictions apply, please contact us for more details at (805) 238-3516
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Spinnaker Financial, Inc.
724 Spring Street, Paso Robles, CA 93446
(805) 238-3516