Financing
Hey, has mortgage terminology got you scratching your head?
Find out what it all means by using our extensive glossary...
We can assist you in obtaining the best program to meet
your individual needs at the best interest rates available!
Click on the loan type to see an explanation of each.
We are familiar with all major lending institutions in the Washington Metropolitan
area and can help you make the financing aspect a pleasant experience, instead of a nightmare!
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Lot loans are normally loans used to fund construction of a new primary residence on your site, or lot, within a specified time frame. A borrower can establish a base from which a future construction-permanent loan can be generated. Some lending institutions may have requirements your lot must meet, which can range from the lot being properly zoned for its intended use, conforms to the neighborhood, has legal access to a maintained road, or is currently without any type of ongoing construction. You must check with your lender to see if any requirements must be met.
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Bridge loans can be a way to take care of financing needs prior to the time your project is ready for traditional bank financing. For example, if you need temporary financing for your down payment and closing costs on a new home when your current home has not yet been sold a bridge loan might be useful. In order to qualify, you must be able to make monthly payments which do not affect the existing mortgage(s) on your current home. Each case is evaluated individually, based on things such as how much existing debt you have on the property you own, how much your current home is worth along with the equity you have, how much you save each month, and the housing market in your area.
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A construction loan normally takes place before construction begins
With this type of loan you can finance the purchase of land and any construction
on that land based upon the lender's requirements.
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A second trust is a term for a mortgage that has a lien position
subordinate to a first lien or mortgage.
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A construction loan can automatically convert to a permanent mortgage upon
completion of construction. This is called a Construction to Permanent Loan.
A Construction to Permanent Loan has only one set of closing costs and one set of
loan documents for both the construction portion of the loan and the permanent
portion. It can be made available to anyone that has an agreement with a General
Contractor or builder that the lender approves. The construction phase can vary
from 6 to 12 months, while the permanent loan is amortized over a 15 or 30 year
period. Some lenders may provide this kind of loan only to approved structures
such as a single family detached home, manufactured homes that are affixed to the
property, and detached dwellings in a Planned Unit Development. The lender can
tell you if they have any special requirements.
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Permanent loans are not really permanent, but they can be amortized over several years, most commonly 15 or 30.. They are the more traditional types of loans that you may be familiar with. The interest rates can be fixed or fluctuate over time up to a specified maximum or minimum.
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