Mortgage Loan Programs

Mortgage lenders differ greatly in the types of loans they offer.

Some lenders offer a wide range of loan programs, some a smaller variety, and some niche lenders focus on very narrow niches. Lenders that focus on a more narrow niche often have specialized loans that other lenders do not offer.

Lenders can offer their different loan programs according to:

credit
loan to value ratio
full documentation loans
stated income loans
no ratio loans
loan term in years
primary residence loans
investment property loans
property type
interest only options
Credit

Lenders typically group credit into different categories and offer different rates for each category. For example, the first category is for credit scores is over 720, the second category for credit scores between 680 to 719 credit scores, etc.

Lenders will continue down to the minimum level of credit they will deal with. Some lenders will go to a credit score of 500 or lower.

Loan To Value Ratio

This is the ratio of the size of the loan to the appraised value of the property. A house worth $200,000 with a loan of $100,000 on it will have a 50% loan to value ratio ($100,000 loan divided by $200,000 appraised value).

Full Documentation Loans

These are loans where the borrower documents their income, assets, and other items. Generally the more a borrower documents in their loan the lower their mortgage rate will be.

Stated Income Loans

Stated income loans are loans where the borrower only states but does not document their income. In general the interest rates on stated income loans are higher than for full documentation loans.

No Ratio Loans

No ratio loans are loans where there is minimal documentation involved on the part of the borrower. These types of loans tend to be more expensive than full documentation loans.

Loan Term In Years

Loan programs are offered for different terms, such as 15 years, 30 years, 40 years, etc.

Primary Residence Loans

These are rates that are offered for properties that the borrower intends to live in. The rates for a primary residence tend to be lower than for an investment property.

Investment Property Loans

These are rates that are offered for investment properties that the borrower does not intend to live in. The rates for an investment property tend to be higher than for a rental property.

Property Type

Property types include single family residences, townhouses, condominiums, 1-4 unit properties, apartment buildings, and other types of properties. Some lenders have restrictions on the types of properties they will lend on. Many will not lend on rural properties such as ranches.

Interest Only Options

This is an option to pay interest only on a mortgage loan. This is a smaller payment than a regular mortgage loan.