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Residential Financing Residential Financing

Residential financing applies to single family homes, duplexes, triplexes and fourplexes, and includes: Owner occupied Second/vacation homes Investment/”non-owner occupied”

These loans are typically categorized by loan size:

  • Conforming loans
  • “Jumbo conforming” – also known as “Super-conforming” or “High Balance”
  • Non conforming, “Jumbo” or “Super-jumbo”

As well by the type of underwriting:

  • Conventional – typically refers to loans that are ultimately underwritten to or by government agency standards (e.g. “Fannie Mae”, “Freddie Mac”)
  • Non-Conventional, sometimes referred to as “Portfolio” – may mirror some or most of conventional standards, but because these loans may be kept on the lender’s balance sheet, they may have flexibility on certain guidelines beneficial to particular borrowers

An example of offerings for fixed rate or partially fixed rate residential financing may include:

  • 30 year fixed, fully amortized · most common mortgage, fixed for 30 years, due in 30 years o Potential options may include up to 40 years amortizations, 10 years of interest only payments, etc.
  • 1, 3, 5, 7 and 10 year ARMs · these loans are typically fixed for the indicated portion and then become adjustable afterward, and due in 30 years

Some options with respect to structuring the cost of the loans can include:

  • “Zero points” – this means no origination charges outside of typical 3rd party, processing and administrative fees
  • “Zero/no cost” loans – this means that the up front costs, including 3rd party, processing, administrative and other fees are rolled into the rate of the loan

Other useful options may include:

  • “limited”, “low”, or “no documentation” financing – for borrowers, such as self-employed individuals, who are unable to show sufficient financial documentation typically required “unique property” financing, which may include properties or situations not financeable under typical guidelines …