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charitymoore25 · Joined: 23 Dec 2008 Posts: 2 2.34 Dollars($)

On a credit union website they have a loan consultant that suggests loans that would be suitable for what state in their questions. Based on what I entered, they gave the options of a 30 year fixed mycommunity loan (6.375% APR) or a 30 year fixed FLEX 97(5.125% APR). So far all I can gather on the difference is the interest rate. Can anyone give me the any other specifics on the differences?

smithsussane · Posted: Tue Dec 23, 2008 9:56 pm Post subject:

Hi charitymoore!

Welcome to forums!

As far as I know, both of them are more or less the same kind of mortgage program. The Flex 97 is a conventional fixed rate home loan which will help the first time home buyers to buy a property with flexible mortgage qualifying terms. As it's a fixed rate mortgage, the monthly payments remain the same over the life of the loan and the interest rates do not fluctuate. The minimum down payment for this type of loan is around 3% of the sales price for owner-occupied properties only.

MyCommunity Loans, similarly, helps home buyers to get a mortgage with fewer eligibility restrictions and various loan options. The underwriting guidelines are flexible in regards to credit score and down payment requirements. These loans are also available at a 0 down and 3% down.

So I think it is the interest rate which can vary in both these loans.

Feel free to ask if you have further queries.

Sussane

carlpruitt · Posted: Tue Dec 23, 2008 11:33 pm Post subject:

The Flex97 is for borrowers with more credit experience and higher credit scores. It is more difficult to qualify for, thus it is considered "less risky" by the lender and therefore has a lower interest rate. MyCommunity loans are easier to qualify for - requiring less credit experience and lower credit scores - and thus considered "higher risk" from the mortgage lenders side and therefore carry higher interest rates. Both are sometimes limited these days by having to carry mortgage insurance and limitations on the loan to value in areas with declining values. In those circumstances, sometimes FHA loans can help.

gmakerley · Posted: Wed Dec 24, 2008 8:42 am Post subject:

see the latter part of carl's post. these programs offered by fannie mae and freddie mac are almost extinct. mortgage insurance is most difficult to obtain, as the mi companies are no longer in the business (they hope) of losing money. their decision-making is far more conservative than ever before, and you'll find that tons of lenders are dropping the programs.

yes, with flex 97, you need 3% down payment; with my community mortgages, the original threshold was 0% down. that no longer exists, and they've gone with 3% also.

i am in agreement with carl that fha may be the most likely program to work for you, but if the credit union can still offer those products, with those rates, you'll just want to do some comparison shopping and take whatever suits you best.

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Difference in 30 yr fixed MyCommunity Loan and 30 yr fixed FLEX 97