Fixed rate mortgages are loans where the interest rate stays the same for the duration of the loan. If you have good credit and plan to live in your home for many years, then a fixed rate mortgage is a great way to ensure a predictable payment for the life of the loan.

• Fixed rate mortgages are more straightforward and easier to understand than adjustable rate mortgages (ARMs)

• Your monthly principal and interest payments will never change, regardless of fluctuations in interest rates due to market changes

• Types of fixed rate mortgages include 50, 40, 30, 20, 15 and 10 year fixed

An adjustable rate mortgage or ARM is one in which the rate changes (adjusts) on a specified schedule after an initial “fixed” period. ARM types vary by the duration of time the rate is fixed before they begin to adjust. In other words, a 3-year ARM will begin to adjust after 3 years. Usually, there is a limit on the number of percentage points the interest rate can increase or decrease in a given period of time.

• ARMs are great if you plan to move in a few years, or if you plan to refinance once your credit score improves.

• Initial interest rates upon closing are usually lower with ARMs than with fixed rate mortgages

• If rates drop after the initial “fixed” period, your mortgage payment will drop as well, but remember: if rates increase and you haven’t refinanced, your mortgage payment will increase too.

With a balloon loan, you make payments according to the amortization (the scheduled payments of principle and interest) of the loan, but the balance of the loan is due in full after an agreed-upon period of time.

• Balloon loans often have a lower interest rate, and can be easier to qualify for than a traditional 30-year fixed mortgage

• At the end of your loan term, you will need to pay off your outstanding balance by refinancing, selling your home, or converting to a fixed rate or ARM mortgage

Low Doc loans are available for those who have special circumstances.

Stated Income Mortgages:

With a stated income mortgage, the lender will verify your assets and employment, but not your income. You will state your income, which must be reasonable for your occupation and assets, but it will not be verified.

• Great option if your debt to income ratio (DTI) is high or above the percentage allowed by conventional loan packages

• Can be a good option if a significant amount of your income comes from sources other than your employment

• Usually the best course of action for self-employed individuals
  

No Ratio Mortgages:

No Ratio mortgage requires no verification of your debt to income ratio (DTI) or your income, but does require verification of your assets. Lenders look at your credit profile and use other information to verify your risk.

• Great option if your debt to income ratio (DTI) is high or above the percentage allowed by conventional loan packages

• They carry lower interest rates than NINA mortgages (see below), but still don’t require full verification
  

No Income No Asset (NINA) Mortgages:

A NINA is a mortgage that does not require verification of your income or assets. Essentially, there is no verification process beyond your credit profile and the value of the property.

• This is a great option if you don’t want to utilize any of your employment assets or income history to secure a loan

• Your credit profile is the only basis the lender has to asses risk, so even the smallest blemish on your credit could disqualify you
  
  

If you need to consolidate your debt, pay off credit cards, or eliminate other high interest debts, ask Butterfly Financial Group about our flexible second mortgage options:

Home Equity Line of Credit (HELOC):

A HELOC acts as a bank account so you can draw money against your home’s equity when you need it:

• Lower interest rate than unsecured credit lines (e.g., credit cards), with a quick approval process and few up-front costs

• You can choose to pay interest only for the initial five or ten year
  "draw period" and have access to pull that money back out if you need to for that term
  

Closed-End Second Mortgage:

A closed-end second mortgage is a good choice for one-time planned expenses, such as a home improvement project, or to consolidate existing debts.

• A closed-end second mortgage is a stand-alone, fixed rate lien that is subordinate to the existing first mortgage on your home

• Differs from a HELOC because it allows a one-time set loan amount for a specific purpose, and usually requires a faster pay back period

• Rates are the base rate plus a percentage based on the type of home and your credit score

• If the second is secured by your primary residence the interest payments are tax deductible up to 100% Loan to Value

• “Piggy Back” options offer possible savings on mortgage insurance

If you’re looking to add on to your home, Butterfly Financial Group has the perfect loan solution.

Construction Loans:

When you’re borrowing for construction costs, you need easy, affordable options designed for your short-term needs. Butterfly Financial Group has the perfect solution for you:

• Short-term, interest only ARMs available—with only 10% down

• Refinance into a traditional mortgage after construction is complete
  

Construction-to-Perm Loans:

Minimize paperwork and save time with our construction-to-permanent option:

• Automatically switches from a short-term construction loan to a traditional long-term mortgage without needing to refinance