As the real estate markets across the country continue to be hot, lenders are getting creative to compete for the business these days. One thing to remember is that, for the most part, any loan is available in any locale. All the lenders (big and small) work under the same federal guidelines. In other words, if you see an ad on TV for a great loan program, contact your favorite local lender and ask if is available. It has been my experience that the TV ads are not all they're cracked up to be and end up being a big nuisance because you're not dealing with a local lender who knows the local market. So, whether you're buying Wenatchee real estate or real estate in New York City... don't be fooled by a "come on" ad. Do your due diligence and work with a local lender whenever possible.
One of the more recent developments is the 40 year mortgage as compared to the standard 30 year mortgage. This, of course, helps reduce the monthly payment... but stretches out your payments another 10 years. In analyzing some ammortization tables, the monthly reduction doesn't seem to justify the extended payment period but, as always, it's something to be considered depending on the individual circumstances.
A new concept that I had never heard of before is the "Shared Appreciation Home Loan". This is where the borrower gets a reduction in the interest rate in return for agreeing to share a percentage of future appreciation with the lender. I don't know if this type of loan is only available for single family residences or if an investment property would qualify. Neither do I know if the lender shares in the selling costs before calculating "equity".
I will see if I can learn more and report back. Whenever you are shopping for a loan, consider all options then choose the best one for your individual circumstances. One of the keys to doing this is finding a good mortgage officer who will be honest with you and not try to sell you on a loan option that will result in the highest commission to them.
Hope you're enjoying the week-end,