TYPES OF LOANS
There are several types of mortgages available that
Rock Hill Financial can find for prospective home buyers.
Conventional mortgages with a 1% down payment are now available!*
Finally, there’s help for people who have been struggling to save for a down payment to buy a home! The borrower puts down 1% of the sale price and the lender provides the other 2%. This means that the loan is “conventional”, and no mortgage insurance is necessary. The 1% Down Mortgage makes homeownership much more affordable for many people who were previously not in a position to buy. And you need not be a first-time buyer to take advantage of this great opportunity!
*RESTRICTIONS APPLY. Call Rock Hill Financial at (610) 668-0168
to find out if you qualify!
This type of mortgage has an interest rate that remains the same throughout the length of the loan. The interest rate is determined at the time the loan is taken out, and can only change if it’s refinanced down the line. This provides stability and predictable monthly payments for the borrower. The most common loan terms for fixed-rate mortgages are 30 years and 15 years. Borrowers who tend to hold property for the long term usually prefer fixed-rate mortgages.
Adjustable-Rate Mortgages (ARM)
An adjustable-rate mortgage has an interest rate that is fixed for a specific period. Terms of adjustable rate mortgages can vary greatly. After the initial stable period, the interest rate adjusts periodically based on market conditions. This type of mortgage may have lower initial rates but can change over time.
The Federal Housing Administration (FHA) loan is very popular with first-time homebuyers because there’s a lower down payment requirement and it’s easier to qualify. The federal government insures FHA loans, but the loans are issued by private lenders. Mortgage insurance is required on all FHA loans, even if you put 20% down, but the amount and duration vary. The home must undergo an FHA appraisal and meet government standards for health and safety.
Home equity loans
Home equity loans are secured by a borrower’s home. A borrower can take out an equity loan if they have equity in their home. Equity is the difference between what is owed on the mortgage loan and the home’s current market value. In other words, if a borrower has paid down their mortgage loan to the point that the value of the home exceeds the outstanding loan balance, the homeowner can borrow a percentage of that difference or equity, generally up to 85% of a borrower’s equity. Because these loans use your home as collateral, they usually have much better interest terms than personal loans, credit cards, and other unsecured debt.
Commercial real estate loans
Commercial real estate loans exist to finance a property that’s used for business-related purposes, such as shopping malls, warehouses, apartment complexes, and office buildings. This loan can be used to buy new property, renovate existing income-producing property, or refinance debt on a commercial property you already own. Investors should be aware that commercial loans have stricter guidelines than residential mortgages, so it’s important to work closely with an experienced broker to ensure the highest likelihood of positive results.
The Department of Veterans Affairs (VA) offers VA loans to eligible veterans, active-duty service members, and their surviving spouses. Created to help veterans access credit and compete in the housing market, VA loans allow more lenient credit ratings, and lower down payment and debt-to-income requirements than conventional loans. VA loans feature limited closing costs, no PMI (private mortgage insurance) requirements, lower interest rates than conventional mortgages, and up to 100% financing!
Commercial Loans for Mixed-Use Properties, Multi-Unit Apartments, Retail, Warehouses, and SBA Loans
Mixed-use spaces are properties that are zoned for different uses, whether residential, commercial, industrial, or institutional. If you're purchasing a building with at least two units of different usage, there's a good chance that the property qualifies for mixed-used financing. Loan amounts are determined after evaluating the potential generated income of the property.
Investment property loans
An investment property is real estate purchased to generate income (i.e., earn a return on the investment) through rental income or appreciation. The buying process is different for an investment property compared to a primary home. Qualifying for these loans involves a different set of requirements than borrowing for a primary residence.