American mortgage companies offer a comprehensive variety of mortgage loans and the mortgage borrowers in the US have to obtain mortgage loans by informing their financial condition or credit scores and submitting the requisite paperwork. Mortgage loans are available for buying houses or refinancing real estate properties. A large number of banks in the US provide a variety of mortgage loans for example, easy financing loans, jumbo loans, conventional loans and government loans to suit the needs of a large number of customers.
In the United States, the Federal Housing Administration (FHA) supervises a number of programs, which include Fannie Mae, Ginnie Mae, as well as Freddie Mac. These are also known as government sponsored entities or GSE’s. The purpose of these programs is to nurture the business of mortgage lending and also to motivate home ownership and construction. The operation of these programs is carried out through purchasing a number of mortgages from the banks and then offering mortgage backed bonds to the investors, which are termed as mortgage backed securities or MBS.
In the United States, the Federal Housing Administration (FHA) supervises a number of programs, which include Fannie Mae, Ginnie Mae, as well as Freddie Mac. These are also termed as government sponsored entities or GSEs. The purpose of these programs is to nurture the business of mortgage lending and also to promote home ownership and construction. The operation of these programs is carried out through purchasing a number of mortgages from the banks and then offering mortgage backed bonds to the investors, which are termed as mortgage backed securities or MBS.
In the United States, the method in which the mortgages are obtained by is known as origination. In this process, the mortgage borrower has to submit the application and paperwork associated with his financial condition to the mortgage underwriter.
Nevertheless, at present a large number of banks are providing “low doc” or “no doc” loans in which the mortgage borrower has to provide minimum financial details. This kind of loan charges a relatively higher rate of interest and the borrowers who have excellent credit scores can only avail them. In some instances, a third party is required and that is known as a mortgage broker.
Sometimes, the mortgage loans are marketed in the open markets to big investors through origination of the mortgage company. Some companies function as correspondent lenders who sell the maximum number of their closed loans to big investors by acknowledging the risks associated with these loans. In some cases, they provide niche loans at higher prices and the investors do not want to originate them. The different types of mortgage loans available in the U.S. include the following:
Foreign national mortgage
Graduated payment mortgage loan
Hard money loan
Term loan or interest-only loan
Negative amortization loan
The following data provides a brief idea about the mortgage rates prevalent in the US mortgage market:
|Mortgage Type||Tenure||Interest Rates(%)||Loan to Value Ratio||Max Tenure of Loans|
|Fixed Rate Mortgage||15 Years||5.36||80%||30|
|Floating Rate Mortgage||1 Year||3.79|
The top mortgage lending institutions in the US include the following:
Aegis Mortgage Corporation
Alaska US Mortgage Company
Option One Mortgage Corporation
U.S. National Mortgage Company
Franklin American Mortgage Company
EverHome Mortgage Company
Absolute Mortgage Company
Last Updated on : 24th August 2013