California Mortgage Group and Menconi & Associates
A Full Service Lending & Real Estate Company

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California Mortgage Group offers a variety of loan programs to meet your purchase or refinance needs. We work with the leading lenders in the industry to provide: Fixed Rate and Adjustable Rate Mortgages (ARM), Hybrid ARMS (3/1, 5/1, 7/1 ARM), FHA Loans, VA Loans, Reverse Mortgages, many Jumbo Loan options, Down Payment Assistance Programs, and Asset Depletion Loan Programs.
 
Fixed Rate Mortgages
Adjustable Rate Mortgages (ARMs)
Hybrid ARMs (3/1, 5/1, 7/1)
FHA Loans
VA Loans
FHA Reverse Mortgage (HECM)
Jumbo Loans
Asset Depletion Loans
California Homebuyers Downpayment Assistance Program (CHDAP)

Fixed Rate Mortgages
The traditional fixed rate mortgage is the most common type of loan programs, where monthly principal and interest payments never change during the life of the loan. Fixed rate mortgages are available in terms ranging from 10 to 30 years and can be paid off at any time without penalty. This type of mortgage is structured, or "amortized" so that it will be completely paid off by the end of the loan term. 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.)
 
Even though you have a fixed rate mortgage, your monthly payment may vary if you have an "impound account". In addition to the monthly loan payment, some lenders collect additional money each month (from folks who put less than 20% cash down when purchasing their home) for the prorated monthly cost of property taxes and homeowners insurance. The extra money is put in an impound account by the lender who uses it to pay the borrowers' property taxes and homeowners insurance premium when they are due. If either the property tax or the insurance happens to change, the borrower's monthly payment will be adjusted accordingly. However, the overall payments in a fixed rate mortgage are very stable and predictable.

Adjustable Rate Mortgages (ARMs)
Adjustable Rate Mortgages (ARM)'s are loans whose interest rate can vary during the loan's term.  The initial rate on an ARM is lower than on a fixed rate mortgage which allows you to afford and hence purchase a more expensive home. Adjustable rate mortgages are usually amortized over a period of 30 years with the initial rate being fixed for anywhere from 1 month to 10 years. All ARM loans have a "margin" plus an "index." Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the property value. The index is the financial instrument that the ARM loan is tied to such as: 1-Year Treasury Security, LIBOR (London Interbank Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI).

Hybrid ARMs (3/1, 5/1, 7/1)
Hybrid ARM mortgages, also called fixed-period ARMs, combine features of both fixed-rate and adjustable-rate mortgages. A hybrid loan starts out with an interest rate that is fixed for a period of years (usually 3, 5, 7 or 10). Then, the loan converts to an ARM for a set number of years. An example would be a 30-year hybrid with a fixed rate for seven years and an adjustable rate for 23 years.
 
The beauty of a fixed-period ARM is that the initial interest rate for the fixed period of the loan is lower than the rate would be on a mortgage that's fixed for 30 years, sometimes significantly. Hence you can enjoy a lower rate while having some period of stability for your payments. A typical one-year ARM on the other hand, goes to a new rate every year, starting 12 months after the loan is taken out. So while the starting rate on ARMs is considerably lower than on a standard mortgage, they carry the risk of future hikes. Homeowners can get a hybrid and hope to refinance as the initial term expires. These types of loans are best for people who do not intend to live long in their homes. By getting a lower rate and lower monthly payments than with a 30- or 15-year loan, they can break even more quickly on refinancing costs such as title insurance and the appraisal fee. Since the monthly payment will be lower, borrowers can make extra payments and pay off the loan early, saving thousands during the years they have the loan.

FHA Loans
FHA home loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily homes. These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn't issue loans or set interest rates, it just guarantees against default.
 
FHA loans allow individuals whom might not qualify for a conventional mortgage obtain a loan, especially first time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible income requirements.

VA Loans
The VA Loan provides veterans and active service members with a federally guaranteed home loan which requires no down payment. This program was designed to provide housing and assistance for veterans, active duty personnel and their families, and the dream of home ownership became a reality for millions of veterans.
 
The Veterans Administration provides insurance to lenders in the case that you may default on a loan. Because the mortgage is guaranteed, lenders will offer a low interest and terms than a conventional home loan. VA home loans are available in all 50 states. The major advantage to a VA home loan is that there is no down payment required to purchase a home. A VA loan may also have reduced closing costs and no prepayment penalties. Additionally there are services that may be offered to veterans in danger of defaulting on their loans. VA home loans are available to military personnel that have either served 181 days during peacetime, 90 days during war, or a spouse of serviceman either killed or missing in action.

FHA Reverse Mortgage (HECM)
Reverse Mortgages are loans available to homeowners aged 62 or older and is a type of home equity loan that allows you to convert some of the equity in your home into cash while you retain home ownership. Reverse Mortgages work much like traditional mortgages, only in reverse. Rather than making a payment to your lender each month, the lender pays you. Unlike conventional home equity loans, most Reverse Mortgages do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. Funds obtained from a Reverse Mortgage may be used for any purpose, including meeting housing expenses such as taxes, insurance, fuel, and maintenance costs.
 
The Reverse Mortgage funds may be paid to you in a lump sum, in monthly advances, through a line-of-credit, or in a combination of the three, depending on the type of Reverse Mortgage and the lender. The amount you are eligible to borrow generally is based on your age, the equity in your home, and the interest rate the lender is charging. Because you retain title to your home with a Reverse Mortgage, you also remain responsible for taxes, repairs, and maintenance. Depending on the plan you select, your Reverse Mortgage becomes due with interest either when you permanently move, sell your home, die, or reach the end of the pre-selected loan term. The lender does not take title to your home when you die, but your heirs must pay off the loan. The debt is usually repaid by refinancing the loan into a forward mortgage (if the heirs are eligible) or by using the proceeds from the sale of your home.

Jumbo Loans
Loans for more than $417,000.00 are called jumbo or non-conforming loans. They exceed the loan amounts allowed by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) — two government-sponsored enterprises that help facilitate the availability of home loans by investing throughout the country. California Mortgage Group offers a wide variety of Jumbo Loan products, call one of our friendly staff for details.

Asset Depletion Loans
For borrowers who may not qualify based solely from income shown on tax returns, there may be another solution.  This loan program allows the use of additional income based on a specific yield rate of the borrower's liquid assets and will allow financing up to 70% of the home's appraised value.  For more detailed information, please call one of our experienced loan officers.


California Homebuyers Downpayment Assistance Program (CHDAP)
This program is available for first-time homebuyers (defined as a borrower who has not had an ownership interest in any principal residence during the previous three years) and is a deferred payment, simple interest rate junior loan.  The CHDAP is equal to 3% of the sales price (or appraised value, whichever is less) and can be used towards the down payment or closing costs.  It may be combined with a conventional, FHA, VA, or USDA first mortgage loan.  There are certain sales price and income limitations based on the county in which the property is located, so be sure to contact one of our experienced loan officers for details.