New Horizon Mortgage Co. offers a variety of loan programs to meet your needs. We work with the leading lenders in the industry to provide:
 
Fixed Rate Mortgages
Adjustable Rate Mortgages (ARM)
FHA Loans
USDA Rural Housing Loans
VA Loans
Jumbo Loans

Fixed Rate Mortgages

The most common type of mortgage program where your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable.

Fixed-rate mortgages are most commonly available for 30 years, 20 years, 15 years and even 10 years. There are also "bi-weekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.)  We also a fixed rate program where you can pick your term, anywhere from 11-30 years.

Fixed rate fully amortizing loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30 year mortgages.

During the early amortization period, a large percentage of the monthly payment is used for paying the interest . As the loan is paid down, more of the monthly payment is applied to principal . A typical 30 year fixed rate mortgage takes 22.5 years of level payments to pay half of the original loan amount.


Adjustable Rate Mortgages (ARM)

Most ARM's have a low introductory rate, which is good anywhere from 1 month to as long as 10 years.

These loans generally begin with an interest rate that is 0.75-2% below a comparable fixed rate mortgage, and could allow you to buy a more expensive home.

However, the interest rate changes at specified intervals (for example, every year) depending on changing market conditions; if interest rates go up, your monthly mortgage payment will go up, too. However, if rates go down, your mortgage payment will drop also.

There are also mortgages that combine aspects of fixed and adjustable rate mortgages - starting at a low fixed-rate for seven to ten years, for example, then adjusting to market conditions. Ask your mortgage professional about these and other special kinds of mortgages that fit your specific financial situation

Most adjustable rate loans (ARMs) have a low introductory rate or start rate, some times as much as 2.0% below the current market rate of a fixed loan. This start rate is usually good from 1 month to as long as 10 years. As a rule the lower the start rate the shorter the time before the loan makes its first adjustment.

 

Index - The index of an ARM is the financial instrument that the loan is "tied" to, or adjusted to. The most common indices are the LIBOR (London Interbank Offered Rate) and the 1 Year Treasury Security.

Margin - The margin is one of the most important aspects of ARMs because it is added to the index to determine the interest rate that you pay when your rate adjusts. Margins are typically around 2.25%.  e.g. if the current index value is 1.75% and your loan has a 2.25% margin, the adjusted rate is 4.00%.

Interim Caps - All adjustable rate loans carry interim caps. Many ARMs have interest rate caps at each adjustment period (usually 1% or 2% every 6 months or a year after the initial fixed term).

Lifetime Caps - Almost all ARMs have a maximum interest rate or lifetime interest rate cap. The lifetime cap varies from company to company and loan to loan. 5% is the typical lifetime cap.


FHA Loans

The Department of Housing and Development (HUD), is the federal department responsible for the major housing programs in the United States. One of these programs is the FHA (Federal Housing Administration) loan. The government does not loan the homebuyer the money, they insure the loan, making it less risky for the lender to make this loan. The borrower pays the FHA Mortgage Insurance Premium (MIP).

 

 FHA Loan Highlights
An FHA loan is a mortgage insured by the Federal Housing Administration.
Contrary to popular belief FHA loans are not just for first time home buyers.

  • Low down payments. FHA loans usually require just a 3.5% down payment. Down payments can also be gifted to the borrower from family members.
  • Low closing costs. FHA currently restricts the amount of origination fees to be a maximum of one percentage point. This usually means lower closing costs than a conventional mortgage.
  • Easy credit qualifying. Those with less-than-perfect credit are more easily approved for a loan through FHA programs because the federal government insures them therefore allowing the banks to lend more freely.
  • Lower overall costs. An FHA loan can have a much better interest rate, which cuts down on the overall cost of the loan.  

USDA Rural Housing Loans

 Are you ready to own a home but are not sure you will qualify due to lack of a down payment?   

Rural Development may be able to help you!  USDA Rural Development has partnered with Schaefer Mortgage to help extend 100% financing opportunities to rural individuals and families.

Advantages of a USDA Rural Housing Loan include:

  • 102% Financing (Up to Appraised Value)
  • Minimal PMI
  • No Down payment Needed
  • Not just for first time home buyers
  • No reserves required
  • No limit on seller concessions
  • 100% Gift Allowed
  • Liberal compensating factors    
  • Liberal credit score requirements
  • Competitive fixed 30-year rates

The Rural Development guaranteed loan program has assisted thousands of customers just like you.

 

 


VA Loans

A Veterans Administration (VA) loan can be used to help American servicemen or women and/or their spouses secure financing for a mortgage purchase. You can check with the veterans administration (through its website or through other information exchanges) to find out whether you are eligible given your service history. Only service members who have received honorable discharges and who have served 90 days or more may qualify for VA loans. Bear in mind that the Veterans Administration isn’t actually giving money towards your house or property. It provides insurance to lenders that you will make good on your obligation. If you get a loan for $417,000 or less, the VA will back you (this number may vary depending on the terms of your contract and agreement with the lender).

Advantages of a VA Loan include:

  • No down payment required
  • Reduced interest rates
  • Loans up to $417,000
  • 30 and 15 Year Fixed Loans
  • No PMI
  • Limited closing costs
  • No pre-payment penalty
  • 4% Seller Concessions


Jumbo Loans

 When you are ready to make a purchase, you are going to be faced with unique terms such as conforming and jumbo loans. So, what is a jumbo loan?

Home loans are classified in a wide variety of ways. They can be classified by the amount loaned, whether the interest rate can be adjusted or not, the length of the payback period and so on. A fairly common and simple term to understand is the jumbo loan.

A jumbo loan is simply a mortgage in excess of the amounts set by government backed agencies that buy or guarantee loans. Companies such as Freddie Mac, Fannie Mae, HUD and what have you will guarantee the purchase of a loan from a lender if certain conditions are met. A discussion of those conditions is beyond this article, but one of them is the amount being borrowed. Depending on the agency in question, the limit is roughly in the $465,750.00 area. If the amount you are borrowing is less than this amount, then it is known as a conforming loan. If you need to borrow more, the loan is known as a non-conforming loan or “jumbo” loan.

 

 Jumbo loans are different from conforming loans in a number of ways. Since no government agency is guaranteeing them, they are considered riskier. If you fail to pay, the lender is stuck with the home instead of simply getting paid by Fannie Mae or some such group. The situation is also considered to have more risk because higher priced homes are generally harder to sell quickly. While this wasn’t necessarily true in the recent hot real estate market, it is when things return to normal as they are now.

Given the higher risk from the perspective of the lender, you can expect to be treated a bit differently. In this case, lenders are going to charge higher interest rates than you would be able to get with a conforming loan. Before you panic, keep in mind we are talking about an 1/8 of 1 percent of a point in interest. For example, a conforming loan for $300,000 may have an interest rate of 3.875% percent whereas the same borrower will have to pay 4.25% percent if they borrow $800,000.