Bank Loan Information

The bank can really do more for you in so many ways, than any other loaning institution. To put it quite simply; they are the “creditors of America.”  Normally they require less documentation, can get the loans done without a lot of hassle and provide great customer care. They have access to more funds and a variety of products.  They usually do not lend for long terms on most loans. Larger banks usually have a mortgage department for those who need long term financing to purchase. They have monthly payments, quarterly payments and annual payments, depending upon the product.

Installment loans:  These loans are available for the purpose of buying a car, a refrigerator, household furniture, consolidation of debt and any number of other needs too numerous to mention.  Installment loans usually need collateral if they are over 5k and usually do not lend less than 1k. However, it depends upon the specific bank’s policies and the customers banking relationship and their credit history.  These are fixed rate loans.

Home Equity Loans/Second Mortgage Loans:  Most of the time a HELOC (home equity line of credit) or a Second Mortgage is obtained through the bank of choice.  These are obtained based upon the loan to value of subject property versus the first mortgage, if applicable.  A HELOC is a line of credit which may be fixed for an initial five year period but then will have a fluctuating rate of interest for the remaining term. The Second Mortgage is usually a fixed rate for the term of the loan.  These loans usually do not carry a long term for repayment. 

First Mortgages Loans:  A bank can and some do loan money to purchase a dwelling.  Usually these are not long term housing loans of 30 years.  A bank housing loan is not for everyone but they are very suitable for those who do not need maximum financing and a long term. The interest rates on these loans are usually only set for the first five years of the loan (may depend upon the bank) and they will adjust to the going rate at the end of five years and every five years thereafter.  Normally they do give fixed interest rates of interest for long periods of time, nor tie up their funding ability with long terms.  With a bank mortgage loan, you can usually get an 80% loan to value and you have no mortgage insurance even it the loan to value was 85%+.

Construction Loans:  Constructions loans are made for the purpose of building a home.  These loans are for a short term only, usually until completion of the property and they are paid off with a mortgage loan. 

Land Loans:  Small loan loans are usually made to buy land to build a house on that consist of small acreage.  Usually if the loan is not paid in full upon starting of constructions; the land loan is paid off with the first draw of the construction loan.

Commercial Loans:  These are loans made to provide funding/cash for larger lending purposes such as to buy businesses, to start a business, to buy commercial office buildings, large plot of land or acreage, and rental properties to name only a few.  These commercial loans are made to builders, subdivision contractors (to build or layout the subdivision not the construction of the houses), real estate contractors, commercial real estate investors and any business or investor (for instance; an investor who buys golf courses, buying casinos etc.). They must qualify for these commercial loans with specific detailed loan parameters that pertain only to commercial lending. 

Balloon Loans:  These are loans made with a balloon payment to pay off the loan, after the initial period of installments.