We here at Lending Bee, Inc. believe that everyone deserves the freedom to choose. That is why we offer a wide array of loan programs to suit your preferences.

All mortgage plans may be classified in two ways: (1) either as a conventional or government loan, and (2) either as a fixed rate loan, adjustable rate mortgage (ARM), or a combination of these two.

Government vs. Conventional Loans

The difference between conventional and government loans is quite simple. FHA, VA, and RHS loans are considered government loans, while all other types of loans are considered conventional.

TYPES OF GOVERNMENT LOANS:

FHA Loans

Federal Housing Administration (FHA) loans require lower down payment. They are also easier to qualify compared to conventional loans, and do not go beyond the statutory limit. The FHA operates under the U.S. Dept. of Housing and Urban Development (HUD).

If you want to take advantage of the benefits offered by an FHA home loan, simply get an FHA loan quote from us.

VA Loans

The U.S. Department of Veterans Affairs provides guarantees to home loans for veterans and service people. The terms are generally promising and rarely require a down payment. Like FHA loans, it is easier to qualify for a VA loan compared to conventional loans.

You can normally get a VA loan of up to $203,000. The U.S. Department of Veterans Affairs provides qualified people a certificate of eligibility, which is honored in VA loan applications to private lending institutions.

If you are considering a VA-guaranteed loan, let us know through our VA loan request form.

RHS Loan Programs

The Rural Housing Service (RHS) under the U.S. Dept. of Agriculture is another type of government-issues loan guarantee. RHS loans are provided to residents of rural areas at a low closing cost. They do not require any down payment. Feel free to contact us if you’re interested in an RHS loan.

State and Local Housing Programs

A good number of states and cities offer various housing finance programs, down payment assistance programs, and programs custom made for first time buyers. Many of these have convenient requirements and less upfront fees.

Likewise, the MCC (Mortgage Credit Certificate) is offered under the loan assistance programs of the state or local level. The MCC gives a tax credit for a percentage of the interest payment. Many of these are classified as fixed rate mortgages. They also have lower interest rates than other loan programs.

TYPES OF CONVENTIONAL LOANS:

Conforming Loans

The distinguishing characteristic of conforming loans is that their terms and conditions adhere to the guidelines arranged by Freddie Mac and Fannie Mae. These two big corporations acquire mortgage loans that adhere to the guidelines set by lending institutions. Then, they convert the mortgages into securities and sell these to investors. They set new maximum loan amounts and other specific details, as well as choose the appropriate properties every year.

Loans that meet the borrower credit requirements of Fannie Mae and Freddie Mac are also called 'A' paper conforming loans.

Jumbo Loans

Some people need to take a loan that’s higher than what Freddie Mac and Fannie Mae offer. These are called 'jumbo' loans. Since these are acquired and traded on a smaller scale, jumbo loans frequently have higher interest rates.

Whether it’s jumbo loan or a conforming loan that you need, simply answer our loan request form to get access to the most suitable lenders in your area.

B/C Loans

Meanwhile, loans that do not meet the borrower credit requirements of Freddie Mac and Fannie Mae are referred to as 'B', 'C' and 'D' paper loans. B/C loans are given to borrowers who have filed for foreclosure, bankruptcy, or have late payments in their credit reports. They provide temporary financing to these applicants until the time that they could already qualify for conforming "A" loans. Examples of this type of loan are the 3/27 ARM Loan and 2/28 ARM Loan.

Fixed Rate Mortgages

An FRM or fixed rate mortgage loan is exactly what it says on the tin; this type of mortgage has a constant or fixed interest rate, so your monthly payments will continue to be the same throughout the loan's period. You can get fixed rate mortgages at increments of ten, fifteen, twenty, twenty-five, thirty, and forty years as well. To be more specific, the shorter the term of the loan, the lower the interest rate you'll get.

Fifteen- and thirty-year fixed rate mortgages are among the most popular terms available. As expected, the standard thirty-year loan has lower monthly payments compared to shorter-term loans. However, if you're willing and able to pay the more expensive monthly payments of a fifteen-year mortgage, you'll be able to save more than half the total interest costs of a typical thirty-year plan and repay your loan twice as fast to boot.

On that note, balloon loans are a subset of the fixed rate loan type. They are short-term, fixed rate mortgages that have constant thirty-day payments based upon a lump sum payment at the end of a three-decade-long fully amortizing schedule. They mostly have terms available for three, five, and seven years.

Adjustable Rate Mortgage (ARMs)

Adjustable or variable loans are mortgage types whose interest rates and monthly payments fluctuate throughout the course of the mortgage period. With this kind of loan, intermittent modifications based on the changes of a given defined index are made to the interest rate. The index of your mortgage is also established at the time of application as well.

TYPES OF ADJUSTABLE RATE MORTAGES:

Negatively Amortizing Loans

There are some ARMs—e.g., optional ARM loans—available that provide payment caps instead of interest rate caps. The former helps control and curb the inevitable increases of a monthly payment plan. If the loan possesses a payment cap but lacks a periodic interest rate cap, then it may be negatively amortized.

To be more specific, if the interest rates climb to the point where the monthly mortgage payment cannot possibly cover the interest due, any unpaid interest will be added to the loan balance, which will in turn increase as well. Then again, if you want, you can always have the option of either paying for the fully amortized amount due or the minimum monthly payment.

Option ARM Loans

The option ARM is one of the most inventive loan types available that are specifically developed to remove the need for a set monthly payment. Once you've made your first payment under this ARM loan scheme, you're allowed to choose between four payment variants each month. Lending Bee delivers a monthly statement that offers you the following:

• A minimum payment.
• An interest-only payment.
• A fifteen-year amortized payment.
• A thirty-year amortized payment.

Fixed Period ARMs

Lending Bee's fixed period ARM deal allows homeowners to enjoy three to ten years worth of fixed payments before the initial interest range inevitably changes. Once the fixed period is over, the interest rate will adjust itself accordingly every year.

Fixed period ARMs are usually linked to the one-year Treasury Securities Index, which gives clients the added advantages of having an interest rate that's lower than a thirty-year fixed rate mortgage plan and a fixed interest rate for a period of time. You can have your cake and eat it too by availing of this ARM loan option.

Two Step Mortgage

A two-step mortgage also sports a fixed rate period, which usually ranges from five to seven years. Once that period is over, its interest rate adjusts itself to fit the current market rate. From there, the mortgage sustains the new fixed rate for the remaining twenty-three or twenty-five years.

Convertible ARMs

There are ARMs available that come with the option to convert them into fixed rate mortgage deals at a certain point in time—usually during the first five years of the adjustment date—if you see interest rates begin to rise. The new rate is then instituted based on the current market rate for fixed rate mortgages.

The other type of convertible mortgage involves a fixed rate loan that contains a rate reduction option. If rates decrease after the time of closing, it enables you to get a small conversion fee to adjust your loan to the present market rate under certain prescribed conditions and circumstances.

Graduated Payment Mortgages (GPMs)

Graduated payment mortgages usually require payments that begin low and steadily increase at prearranged periods, hence its name. Reduced initial payments will enable you to meet the criteria for a bigger loan amount too. Of course, your mortgage will be negatively amortizing throughout the starting years of the loan before it pays off the principal at a remarkably rapid rate later on. To put it in plainer terms, in order to catch up from the earlier lower payments, the later monthly payments will eventually become significantly costlier and higher than ever before.

Buydown Mortgage

This loan type has a preliminarily discounted interest rate that slowly rises to an approved fixed rate within one to three years. This initially economical rate provides you the benefit of lower initial monthly payments for the first few years of the loan (which you can use for home improvement and furnishings) and enables you to qualify for more real estate purchases with the same income.