Overview of Mortgage Loan Programs
Not all mortgage companies are created equal. Alaska USA Mortgage Company has a wide variety of loan products that will fit your needs, and the right professionals to advise you every step of the way. If you see anything you think might be the right fit for you, or if you have any questions about the option available to you, don’t hesitate talk to one of our mortgage loan specialists.
Conventional Home Loans
Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac. Conventional loans can be a fixed-rate mortgage or an adjustable rate mortgage; they require a down payment by the borrower and have a wide range of payment period terms.
Alaska USA offers conforming conventional home loans. Each state has conforming loan limits, so call an Alaska USA mortgage originator today for more information.
Fixed-Rate Mortgage Loans
Fixed-rate mortgages are the most common mortgage for first-time homebuyers because they're stable. Typically the monthly mortgage payment remains the same for the entire term of the loan - whether it's a 15-year, 20-year, or 30-year mortgage - allowing for predictability in your monthly housing costs.
Benefits of a fixed-rate mortgage:
- Your mortgage payment won't be affected if interest rates increase. This is especially helpful if you plan to own your home for five or more years.
- You know what your monthly mortgage expense will be for the entire term of your mortgage. This can help you plan for other expenses and long-term goals.
- While your actual mortgage payment will not change, your total monthly payment can occasionally increase based on changes to your taxes and insurance. In many cases you can choose to pay these costs as part of your monthly payment through an escrow account.
Alaska USA Federal Credit Union is built on a strong tradition of helping military personnel. It opened its doors in 1948 to meet the credit needs of the federal civil service personnel who had been recently transferred to pre-statehood Alaska.
Alaska USA Mortgage Company continues that tradition by providing an assortment of loan programs that are specifically designed to provide access to home financing for active military personnel and U.S. veterans. VA home loans are guaranteed by the U.S. Department of Veterans Affairs, and offer a number of benefits.
- No down payment
- No monthly private mortgage insurance (PMI)
- Closing costs may be paid by the seller, up to 4% of the sales price
- Can be combined with other down payment assistance programs
- Assumable to qualified borrowers
- Even if you have used your VA eligibility in the past, you may still be eligible for another VA loan
- If you have a current VA loan, you may be eligible for a Streamlined VA Rate Reduction to lower your payments
There are lots of good reasons to choose an FHA-insured loan, especially if one or more of the following apply to you:
- You're a first-time homebuyer.
- You don't have a lot of money to put down on a house.
- You want to keep your monthly payments as low as possible.
- You're worried about your monthly payments going up.
- You're worried about qualifying for a loan.
- You don't have perfect credit.
If any of these things describe you, then an FHA-insured loan may be right for you.
FHA-insured loans have competitive interest rates because the federal government insures the loans for lenders. FHA-insured loans have a low 3.5% down payment and the money can come from a family member, employer, or charitable organization as a gift. Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.
You may use an FHA-insured mortgage to purchase or refinance a new or existing 1- to 4-unit home, a condominium, or a manufactured or mobile home (provided it is on a permanent foundation).
What kinds of insured loans does FHA offer?
- Fixed-rate loans - Most FHA-insured loans are fixed-rate mortgages (loans). The advantage of a fixed-rate mortgage is that your interest rate stays the same during the loan period, so you know exactly how much your monthly payment will be.
- Adjustable rate loans - With FHA's adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan.
The FHA, Federal Housing Administration, has been helping people since 1934. FHA insures loans for lenders against defaults - it does not lend money or set interest rates. Alaska USA Mortgage Company is an FHA-approved lender. Contact an Alaska USA mortgage originator today for more information.
Adjustable Rate Mortgages
An adjustable rate mortgage, or ARM, is a mortgage with an interest rate that is linked to an economic index. The interest rate, and your payments, are periodically adjusted up or down as the index changes. With a fixed rate loan, a borrower "locks in" to a specific interest rate and pays that rate for the life of the loan unless he or she decide to refinance.
ARMs aren't for everybody. They are ideal for borrowers with stable, increasing income potential, since the rates for these mortgages are usually lower during the first few years. Homeowners who are looking for short-term purchases also enjoy the adjustable rate mortgage option.
Any loan over the $424,100 conventional loan limit is considered a jumbo loan. Loan limits may differ on a county-by-county basis. Jumbo loans are much more flexible than most people think. They can be a fixed-rate or adjustable rate mortgage, whichever suits your purpose.
- Investment Property
When it comes to buying investment property, you need to understand the numbers. Investors have different goals. Some want to buy a single-family home, duplex, or multi-family (1-4 units). Others want to buy a vacation home in an area they want to visit. They may use it from time to time and rent it out the rest of the year. Whichever approach you decide to take, make sure you understand the numbers, including the cost of financing, a down payment, repairs, etc. Be realistic about whether you can afford to make the mortgage payments for as long as it may take to find a buyer or a tenant.
Decide what you are buying. All things being equal, second homes may offer better financing, but it will depend on where the property is located and what you intend to do with it. Talk with your tax advisor about how you plan to use the property to decide whether it would be better to buy a second home or an investment property.
A portfolio home loan can help finance your primary residence. You may use a portfolio home loan to purchase a new or existing single-family residence, detached, or zero-lot line home.
- Low down payment available
- Gift funds for closing costs are allowed
- Seller's contribution to closing costs allowed
Fixer-uppers, foreclosures, or distressed homes:
If you're buying a fixer-upper, the FHA 203(k) streamlined rehabilitation (limited repair) program lets you finance up to an additional $35,000 into your mortgage for property repairs or improvements to your home or rental property.
The program can be used for a number of improvements and repairs including:
- Repair or replacement of roofs, gutters, downspouts, and flooring
- Repair, replacement, or upgrade of HVAC, plumbing and electrical systems
- Minor remodeling that does not involve structure repairs, such as kitchens and bathrooms
- Purchase and installation of appliances, including freestanding ranges, refrigerators, washers and dryers, dishwashers, and microwaves.
- Low down payment available
- Up to $35,000 for cosmetic improvements
- Primary residence only
- Purchase transactions and no cash-out refinance transaction
- Great for distressed or aged properties
Rural Development Home Loans
The USDA Rural Development Guaranteed Housing Loan Program (USDA RD) is primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate, or relocate a home.
USDA RD loans are fixed-rate, 30-year mortgages, and require no down payment. They are only available in designated rural areas, and income limits for borrowers vary per area.
- HUD - Section 184
HUD - Section 184
The Section 184 Indian Home Loan Guarantee Program is a mortgage product specifically for American Indian and Alaska Native families, tribes, Alaska Villages, or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership in Native American communities.
What types of loan options are available under Section 184?
- Purchase of an existing home
How Does Section 184 Work?
HUD guarantees the mortgage loan made to eligible borrowers. The loan guarantee assures the lender that the loan will be repaid in the event of a foreclosure. The borrower pays a 1.5% loan guarantee fee at closing which may be financed in the mortgage or paid in cash. The borrower applies for the loan with a participating lender. If leasing tribal land, they work with the tribe and the Bureau of Indian Affairs to obtain an approved 50-year lease. The lender then evaluates the necessary loan documentation and submits the loan for approval to the HUD Office of Loan Guarantee.
Who is Eligible for a Section 184 Loan?
- American Indians or Alaska Natives who are enrolled members of a federally recognized tribe
- A member of an Alaska Village and Regional Corporation established pursuant to the Alaska Native Claims Settlement Act
- An Indian tribe
- A Tribally Designated Housing Entity (TDHE)
- An Indian Housing Authority (IHA)