Coast Village Lending

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Coast Village Lending

1250 Coast Village Road
Montecito, CA 93108
Direct: (805) 969-7161
Cell: (805) 680-3024
Fax: (805) 898-4435


Types of Loans

Adjustable Rate Mortgage
Conventional Mortgage
FHA Loans
Fixed Rate Mortgage
Hybrid Mortgage Loans
Interest Only Loan
Jumbo Loan
Negative Amortization Mortgage
No Documentation Loan
Option ARM Loan
Pledged Asset Loan
Reverse Mortgage
VA Loan

Adjustable Rate Mortgage ( More information on ARM loans.)
Adjustable Rate Mortgages (ARMs) feature an interest rate that adjusts up or down at specified intervals of the mortgage term. The initial interest rates for ARMs are lower than those of fixed rate mortgages. However, after that preliminary low-rate period ends, the rate adjusts periodically – usually upwards. This makes ARMs a viable choice for borrowers who do not plan to stay in their home for an extended period of time. Others choosing an ARM run a risk of suddenly being faced with unaffordable monthly payments.

ARMs are typically easier to qualify for than fixed rate loans because the starting rate and payments are lower.

A wide variety of ARMs are available, offering varying initial fixed rate periods and adjustment terms. ARMs featuring initial fixed rate periods of three, five, and seven years, with rates adjusting annually thereafter, are common. These are generally referred to as 3/1, 5/1, and 7/1.

Conventional Mortgage
Loans that are not insured by the federal government and for amounts under limits established by Fannie Mae and Freddie Mac (government-regulated private corporations) are considered conventional loans. Fannie Mae and Freddie Mac administer these loans. Currently, the conventional loan limit for single families is $417,000 in the continental United States.

FHA Loan
FHA loans are insured, but not funded, by the Federal Housing Authority. Essentially designed for low- and middle-income borrowers and first-time borrowers, FHA loans tend to have more lenient qualifying criteria than conventional loans.

Fixed Rate Mortgage
A fixed rate mortgage has an interest rate and monthly payments that never change. These mortgages afford borrowers stability because they are unaffected by the ups and downs of fluctuating rates. There is no risk of a sudden rate increase making monthly payments unaffordable. Consequently, many people find that the consistent payment amounts aid them in managing their budgets. This is also a popular and practical option for people planning to stay in their homes for several years because they can end up saving money in the long run.

Fixed rate mortgages can be more difficult to qualify for than other types of loans, however. And if interest rates decrease significantly, refinancing is required to capitalize and obtain lower payments.

Shorter-term fixed rate mortgages offer significant interest savings over longer-term fixed rate mortgages, but have higher monthly payments.

Hybrid Mortgage Loans
Hybrid mortgage loans, a combination of fixed and ARM loans, come in different varieties.

* Buydown Mortgage
With a buydown mortgage, the borrower pays the lender an initial lump sum payment in exchange for a reduced rate and monthly payments during the first few years of the loan. With this type of hybrid mortgage loan, the initial payment can also be financed, in some cases.

* Convertible ARM
Some hybrid mortgage loans include an option to convert to a fixed-rate mortgage at designated times (usually during the first five years on the adjustment date), in order to avoid rising rates. The new rate is established at approximately the current market rate for fixed-rate mortgages, making this.

The conversion is typically done for a nominal fee and requires little paperwork. However, a disadvantage of the convertible ARM is that the interest rate tends to be a bit higher than it is for other comparable loans.

Conversely, some convertible mortgages consist of a fixed rate loan with a rate reduction option. In a declining rate environment, the loan can be adjusted to a new lower fixed rate for a nominal fee. Again, rates and points for these types of hybrid mortgage loans can be a little bit higher than other loans.

* Graduated Payment Mortgages
Graduated payment hybrid mortgage loans have payments that start low and gradually increase at predetermined times. A lower initial payment allows you to qualify for a larger loan amount. The monthly payments will eventually be higher in order to catch up from the lower payments. This loan negatively amortizes during in the beginning, then rapidly pays off principal in later years.

* Two-Step Mortgage
Two-Step hybrid mortgage loans have a fixed rate for a certain period, usually five or seven years, after which the interest rate adjusts to a current market rate. After that adjustment this hybrid mortgage loan maintains the new fixed rate for the remaining 23 or 25 years.

Interest Only Loans (Fully explain interest-only loans)
The best way to explain interest only loans is as loans in which for a set term the borrower pays only the interest on the money borrowed; the principal is not repaid. At the end of the term the borrower may renew the interest-only mortgage, repay the principal, or convert the loan to a principal and interest payment loan.

Jumbo Loan
Jumbo loan amounts exceed the conventional loan amount limit of $417,000. These mortgages are funded by the private investment market.

Negative Amortization Mortgage
With a negative amortization home loan, the borrower has the option to make monthly payments that are less than the accruing interest on the loan. Consequently, if the borrower chooses to make the minimum monthly payment on a negative amortization home loan, the loan balance will increase by the amount of interest not paid on the loan. The upside is the borrower can choose to make the full loan payment, the minimum payment, or any amount in between. The negative amortization home loan can be practical for someone who does not have a regular, steady income, or someone who wishes to make the lowest possible mortgage payments.

No Documentation Loan
No Documentation loans provide a convenient means of financing for people who do not wish to verify their income, are self-employed, have less-than-perfect credit, little credit, or no credit at all. These mortgages typically have slightly higher interest rates and are granted by fewer lenders.

Option ARM Loan
The Option ARM Loan offers flexibility in that it allows the borrower to choose from different monthly payment options. The borrower can opt to make a minimum monthly payment, an interest-only payment, or a fully amortized payment (principle and interest). Those choices make the Option ARM Loan a viable choice for people whose income varies from month to month, or for people seeking to make the smallest monthly payment possible. However, it is important to note that making the making minimum monthly payments only can result in negative amortization.

Pledged Asset Loan
The Pledged Asset Loan program allows you to "pledge" eligible securities rather than liquidating them -- and subsequently paying capital gains taxes on them -- in order to come up with money for a downpayment on a property. While pledged, the securies may continue to appreciate in value and earn interest.

Reverse Mortgage
A reverse mortgage is a loan against your home that you do not have to pay back as long as you live there. You can borrow up to 65% of the home’s appraised value but there are certain restrictions. To qualify for a reverse mortgage, you must be at least 62 years of age and have some equity built up in your home. There are no income or credit requirements but you must occupy the home as your primary residence.

VA Loan
The Veterans Administration insures, but does not fund, loans for those with qualified military service. These loans offer more relaxed qualifying criteria and less stringent down-payment requirements than conventional loans.


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