Information for first time home buyers
Adjustable Rate Mortgage: gives the option to make low payments for the first few years of the loan after which the rates and hence payments can be raised to any high level depending upon the index associated with your mortgage.
Alternate Doc: Alternate documentation allows documentation to be obtained directly from the borrower.rather than from the borrower’s employer, bank, or mortgage servicer, i.e. bank statements instead of Verification of Deposits (VOD), Paystubs and W-2’s instead of Verification of Employment (VOE), etc.
Pay Option ARM: Also known as Option ARM, Pick a Payment, Cash Flow Loan, Negative Amortization Loan. This loan product allows the borrower to pick between at least three payment options each month (Minimum Payment, Interest Only Payment or Fully Amortized Payment). If the borrower chooses to pay the minimum payment in any given month, then the difference between the fully indexed pay rate and the minimum pay rate is added to the principal balance of the loan resulting in negative amortization (or deferred interest).
Reverse Mortgage: A special type of home equity loan for persons 62 and older. Reverse mortgages allow owners to convert some of the equity in their homes to cash. The loan does not usually have to be repaid during the homeowner’s lifetime. Loan advances are not taxable and do not affect the homeowner’s Social Security or Medicare benefits.
Interest Only Loan: This loan product allows the borrower to make monthly mortgage payments in an amount equal to that which will cover the interest payment on the principal amount ofthe loan. Therefore, the loan balance stays the same for the term of the interest only period of the loan. If the interest only period expires prior to the expiration of the loan then the loan will begin to amortize at a schedule tied to the remaining term of the loan.
HELOC: Home Equity Line of Credit. This loan product allows borrowers to tap into and borrow against the equity in their home. This loan product is typically priced off of and floats with the PRIME rate.
Full Doc: Full documentation refers to standard Fannie MaelFreddie Mac documentation. It is in the form of fully completed documents that are sent directly to the borrowers employer or depository and upon completion,must be returned directly from the employer or depository.
SlVA: Stated Income Verified Assets. This documentation type requires that the primary source of income be verified while the amount of income, although disclosed, is not verified. Unearned or passive sources of income, if used to qualify, must be verified in the standard manner.
SISA: Stated Income/Stated Assets: The borrower’s employment is stated and verbally verified. The borrower’s income and assets are stated and not verified.
NINA:No Income/No Asset. The borrower’s employment, income, or assets are not disclosed or verified.