Understanding the Types of Home Loans Available; St Louis Mortgage Watch

Paramount Mortgage Company - St Louis

Conventional Loan Programs

Conventional loans are traditional home mortgages, not backed by any government program of insurance or guarantee. There are standard underwriting guidelines for conventional conforming loans up to $417,000. These loans can carry fixed or variable (ARM) rates and a variety of repayment terms can be tailored to your individual needs. Buyers will need cash reserves/savings to cover two months of payments and generally, there is not a penalty for prepayment.

Fixed Rate Mortgage

Fixed Rate Mortgages provide the security of a fixed principal and interest payment for the term of the loan. The term of a fixed rate mortgage can provide the flexibility needed to meet your specific goals. Common fixed rate mortgage terms are 10, 15, 20 or 30 years.

Adjustable Rate Mortgage

An Adjustable Rate Mortgage (ARM) features a variable interest rate which is periodically adjusted after a set term, generally one to ten years. For example, a 3/1 ARM is the same fixed rate for three years, then adjusts annually, within established guidelines, to match current interest rates.

ARMs may provide the security, flexibility and affordability prospective home buyers desire. These loans are especially attractive to home buyers who plan to trade up in future years. Generally, initial interest rates are lower than on fixed rate mortgages.

Jumbo Mortgage

If the anticipated amount of your mortgage loan exceeds $417,000, we offer a variety of mortgage options which will meet your needs. So-called non-conforming jumbo loans can be either fixed or adjustable rate mortgages. Underwriting guidelines may vary depending on program selected, down payment and actual loan amount.

FHA/VA Loan Programs

Paramount Mortgage is an FHA/VA approved lender.

FHA (Federal Housing Administration) backed loans are ideal for first-time home buyers and those low- to moderate-income borrowers. Loans are insured by the FHA. Down payments may be as little as 3.5% and 100% of the down payment funds can be from a gift. There are also several other options for the source of funds needed for closing. The seller can contribute up to 6% towards closing costs, prepaid cost and points. No cash reserves are required for loan approval. FHA loans can be fixed or adjustable rate.

The 2009 FHA loan limits for the St. Louis region are:

  • One-Family: $281,250
  • Two-Family: $360,050
  • Three-Family: $435,200
  • Four-Family: $540,850

VA (Veterans Administration) loans are available to individuals who have served or are currently in the U.S. armed forces that meet eligibility requirements. VA mortgages may be provided with no down payment requirement, making them ideal for first-time borrowers. Loan amounts may be as much as $417,000 with full entitlement. Requirements are generally 2 years in the armed forces with veterans benefits. A Certificate of Eligibility is required. The seller can pay closing costs and prepaid items. There is a 100% financing option and there are no penalties for prepayment.

St. Louis Mortgage Interest Rates – November 10, 2010

  • 30-year fixed-rate  4.250% no points
  • 15-year fixed-rate  3.750% no points
  • 5/1 adjustable rate 3.50% no points
  • FHA/VA 30-year fixed rate  4.250% no points
  • Jumbo 5/1 ARM 3.375% no points
  • Jumbo 15 year fixed-rate  4.00% no points
  • Jumbo 30 year fixed-rate  5.00% no points

For more information or if you have questions on mortgage rates in St. Louis you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.



*Note- The above rates are based upon a typical sale price of $187,500 with a 20% percent down payment leaving a loan amount of $150,000 to a borrower with a 720 credit score for a loan with no discount points charged. Rates and terms will vary depending upon loan amount, home value, credit and income of borrower.

This information is provided by this author and this site for informative purposes only and is not warranted or guarteed in any way.



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