If you feel more comfortable with a mortgage that has the same monthly principal and interest payment for the life of your loan, you should consider a fixed-rate mortgage. Federated Lending Corporation offers terms of 7 through 30-years. We publish rates for the standard 15 and 30 year mortgages. Ask a loan officer for a personalized quote for any term.

If an initially lower interest rate and lower monthly payments appeal to you, think about our adjustable-rate mortgages (ARMs). As interest rates rise and fall, the interest rate on these loans also rises and falls. Federated Lending Corporation offers a 6-month and 1-year adjustable in varying loan amounts. We also have combination mortgages that combine the low introductory payments of an adjustable-rate mortgage with the stability of fixed payments in the first few years. You may want to consider a 3/1, 5/1, or 7/1 combo loan. After a fixed payment in the first 3, 5 or 7 years, your loan converts to a 1-year adjustable, with a rate change every year thereafter. To protect you against sharp rate increases, FLC ARMs feature yearly and lifetime interest rate caps.

Combination mortgages are loan programs that combine the low payments of an adjustable rate mortgage with the stability of a fixed-rate mortgage during the initial years of the loan. Statistics show that most homeowners have their mortgage loans an average of seven years before moving or refinancing. This means that a "combination" mortgage may provide a cost savings to many home buyers who might not even be considering these alternative financing vehicles. Combination mortgages fall primarily into two categories: The 3/1, 5/1 and 7/1 mortgages begin with a fixed rate during the initial payment period. At the end of the 3-, 5- or 7-year period, the loan automatically becomes a 1-year adjustable. The initial rates on these combination loans are lower than the rates on a fixed-rate mortgage but higher than a 1-year adjustable. Their advantage over the 1-year adjustable is the length of time (3, 5 or 7 years) that they provide payment stability. The 5/25 and 7/23 loans are excellent options for buyers who know they will move after an initial five- or seven-year period, or who don't mind refinancing if they later change their minds about selling. Although the initial term is short, the payments are amortized over 30 years, so with a start rate lower than the regular 30-year fixed rate, buyers can save money. At the end of the initial period, the unpaid principal balance of the balloon note is due as a lump sum on the balloon maturity date. If the borrowers have decided not to move, they may choose to exercise their conditional refinance option which would convert the loan to a 25-year or 23-year fixed-rate mortgage.

FHA (Federal Housing Administration) mortgages offer low down payments and income, asset, and credit qualifying criteria that may be more attractive to buyers whose mortgage needs fall within the FHA regional loan limit guidelines. An FHA mortgage is assumable under certain conditions, so you may be able to offer it to future buyers - making it an attractive selling feature.

 

Sampling of loan limits for FHA loans (One-family effective 1/01/09 by county)

Bucks, Chester, Delaware, Montgomery, Philadelphia, and York	$417,000
Northampton, Lehigh, Carbon	$402,500
Adams, Cumberland, Dauphin, Lebanon, and Perry	$271,050
Call us for other county limits

 

FHA is a fixed-rate or adjustable-rate program with a minimum down payment of 3.5% percent of the purchase price. Because qualifying ratios are more lenient, you are able to be approved for a larger loan amount with less income. All of your closing costs may come from a gift or up to 6% from the seller. There are loan amount limitations that vary by region across the nation.

VA (U.S. Department of Veterans Affairs) mortgages often require no down payment and are available to eligible military personnel and members of the National Guard, veterans, and widows or widowers of veterans.

 

To qualify, you must obtain a Certificate of Eligibility from your local VA office. If you are not sure whether or not you are eligible, contact your local VA office -- or call a FLC loan officer to assist you.

 

With a zero down payment on VA loans, which are fixed-rate only, and a higher qualifying debt ratio (41%), this loan makes home ownership a reality for men and women who serve and have served our country. All of the closing costs may be paid by a third party, including the seller.

Qualified borrowers can receive well in excess of $1,000,000 to finance their residential dwelling.  Federated Lending Corporation has designed a variety of jumbo financing options for mortgages greater than $417,000.  Down payments start as low as 20%.

 

Some of the jumbo financing options we offer include: A fixed-rate jumbo mortgage for up to $1,000,000 which requires a down payment of 20% for a single-family, primary home purchase. We also offer a variety of fixed-rate, adjustable-rate and combination jumbo loan programs for second homes, condos, and PUDs (planned unit developments), and stated income, primary home purchase and rate & term refinance programs for self-employed borrowers offer 70% financing up to $750,000. Both our fixed-rate and adjustable-rate stated income loans offer 70% financing up to $750,000 or 55% financing up to $1,000,000 on single-family, detached primary homes. 

If you are purchasing or refinancing a home in Pennsylvania or New Jersey, you will want to inquire about our simplified loan documentation process that provides loan approval quickly. You may obtain information about these mortgages and other services by calling 800-355-9220.

The balloon loan is typically amortized over a standard fixed rate mortgage period but has a shorter maturity. At maturity, the loan generally needs to be paid off, with some loans having a conditional option to refinance. These types of loans are for people who know that they will only be in a home for a set number of years (5, 7 and 15 years are the most common) and are usually amortized over a 30 year period. These loans carry interest rates that are less than the 30 year rate.

If a home buyer is working with a general contractor (builder) to construct a home, the builder may require partial payments prior to the final completion of the home. This program allows a home buyer to build a home and permanently finance the home with one closing. This results in one application, one closing, assurance of permanent loan prior to construction, and a reduction of closing costs.

Some self-employed borrowers may benefit from No Income Verification mortgage loans. The processing is very simple, and the rates and terms are similar to conforming loans. These are usually loans for people with good to excellent credit who don't qualify under normal underwriting guidelines due to insufficient income.