| 1. |
There are
two major categories of loans: Government loans (VA and FHA)
and Non-Government loans known as "Conventional Loans."
Government loans are seldom used in the coastal areas of California
because of higher home prices, higher interest rates and more
restrictions inherent with Government loans. |
| 2. |
Conventional
loans are either conforming or jumbo, with jumbo loans being
those with a loan amount in excess of $417,000. |
| 3. |
Home loans
are either adjustable or fixed rate. The benefit of adjustable
rate loans is that the payment is initially lower than with
a fixed rate loan, a concession made by lenders in exchange
for the borrower sharing the interest rate risk with the lender.
Lower initial payments make it easier for a buyer to qualify
for higher loan amounts than possible with fixed rate loans. |
| 4. |
Jumbo fixed
loan rates are about 1/2 % higher than conforming rates. |
| 5. |
Rental
or non-owner occupied home loan rates are about 1/2 % higher
than owner-occupied rates. |
| 6. |
Many factors
affect your final interest rate. Your cash equity, credit report,
monthly income and debt ratios are most important. |
 |
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