Loan Programs

We have a variety of products to satisfy each of your financing needs. From the most conservative loans to your more speculative financing needs, GSF will work aggressively to find the right product to make it happen for you. Below is a partial list of programs offered by GSF Home Loans with a brief description of the key elements. For a complete list of the programs that we offer, contact us at 520-795-3566. NEW HOME CONSTRUCTION - Experienced from Start to Finish. One Time Close, Interest Only Payment, or 1% Pay Option Programs RESIDENTIAL AND RAW LAND INVESTMENTS - We know Tucson Investment Properties. 100% Financing - No mortgage insurance, 2% Pay Option, Interest Only Payment, Cash Out and Rate/Term Refinance COMMERCIAL INVESTMENTS - Commercial Loans with a personal touch for Institutional Investors and Private Investors. We also provide real estate investment analysis.

Buying a Home

Congratulations on your decision to purchase a new home! We know that this is typically one of the biggest purchases of your life and we are committed to making the loan process as easy and stress-free as possible. Whether you're looking to purchase your first home or your tenth, we will find you the best loan program at the lowest rate and fees possible. We are committed to personal customer service and are at your disposal to answer any questions you may have and make sure that you are comfortable with every aspect of the loan process. As you shop and compare for your mortgage loan, we're confident that you will not find a more knowledgeable and customer service-oriented company who has the reputation of getting mortgage loans done on time, every time. We want you to feel comfortable with the mortgage you receive from us and know that there is no other deal that is better suited for you.

In this section, you will find detailed explanations of the various exiting loan programs that exist for purchasing a home and the various reasons for using them.

Fixed Rate Loans

By far the most popular type of mortgage loan, the fixed rate loans typically come in 30, 25, 20, 15, and 10 year terms. The interest rate agreed is guaranteed to remain the same until the loan is paid off. Principal reduction payments and interest payments are paid on a monthly basis, often times combined with homeowner's insurance (hazard insurance), property taxes and sometimes mortgage insurance payments to make the total payment. These loans are utilized in both purchase and refinance situations and offer no future risk.
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Adjustable Rate Mortgages (ARM)

These loans have a set period of time that the interest rate is fixed and then the interest rate will adjust dependent upon current market conditions. The principal and interest payments on these loans are most often calculated based on a 30 year term, but have shorter terms where the interest rate is fixed. For instance, a 1 Year ARM is fixed for 1 year and then becomes adjustable; a 3 Year ARM is fixed for the first 3 years before the interest rate adjusts; a 5 Year ARM is fixed for the first 5 years before adjustment, etc. These loans adjust based on a particular 'index' such as the 1 Year Treasury Bill or 1 Year LIBOR (London Inter bank Offered Rate). They have an agreed upon 'margin' which is added to the 'index' at the appropriate time of adjustment to become the new interest rate. These loans also typically have a maximum amount the interest rates can adjust at each time of adjustment and a maximum amount the rate can adjust over the life of the loan. These are called Periodic Adjustment Caps and Lifetime Adjustment Caps. This ensures and protects you from outrageous adjustments. Meaning that your interest rate can not suddenly adjust 10% with little warning. They often offer lower starting interest rates than fixed rate loans.
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Balloon Loans

Balloon Loans are mortgage loans that also have a set period of time in which the interest rate is fixed; however, at the end of that period of time, the remaining principal balance is to be paid off in full in a balloon payment. These principal and interest payments on these loans are most often calculated based on a 30 year term. Sometimes, these loans have a 'conversion option', meaning that at the end of the initial term, an option exists to convert the balloon payment into a fixed rate mortgage at current market interest rates. These loans are utilized for many the same reasons as the Adjustable Rate Mortgages. If you are planning on owning the home for a set period of time, such as 5 years, then a 5 Year Balloon mortgage would allow for that period of time to have a fixed rate with the anticipation of either selling or refinancing at the end of that time. These also present some risk and should be discussed with Lance whether this is a good program for your particular situation.
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2/1 Buy downs

2/1 Buy downs are fixed rate loans where the lender buys down the interest rate 2% for the first year and 1% for the second year. As of the third year of the loan, the interest rate stays fixed for the remainder of the term. The loan is set for a 1% adjustment after year 1 and year 2. It is not dependent on what the interest rate market is doing. The actual dollars are pre-paid for the difference in interest payments. For instance, if you choose a 2/1 Buy down at 8%, this means that the actual loan is based on an 8% 30 Year Fixed mortgage; however, either the lender, the seller, or the buyer is paying the dollar difference between an 8% rate and a 6% rate for 12 months and the difference between an 8% rate and a 7% rate for the next 12 months. This dollar amount is paid up front at the time of closing. This presents less risk because the adjustment is guaranteed without any question as to the interest rate at the time of adjustment. Buy downs are only available on purchase transactions. These loans are used to help the buyers 'grow' into more expensive houses with the anticipation that the buyer's mortgage payment will increase as their earnings grow, or pay off current debt within first two years, or because they are anticipating fixed rates to drop to a level where a refinance would be advantageous.
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Refinancing a Home

When to Refinance? There are many questions asked when considering the refinancing of a home loan, including: When do I refinance? How much should I consider current interest rates? Should I consider taking cash out of my equity? When does it make sense to spend the money to lower my interest rate? The answers vary depending upon your individual circumstances and whether you are looking to lower your monthly payments, lower your interest rate, change the term of your mortgage, or reallocate the equity you've built in the form of a 'cash out' refinance.

The following sections should help you decide which applies to you and what to look for when considering a refinance and shopping for loan programs. As always, we encourage you to contact us at anytime to discuss the feasibility and reasons for refinancing your home.

Rate and Term Refinance

A Rate and Term Refinance simply means a refinance in which your current loan is paid off and replaced with a new loan at different terms and/or interest rate. Closing costs and pre-paid items can be included in this loan or 'rolled into' the loan amount meaning that you do not physically come out of pocket to pay these fees, or they can be paid out of your pocket at closing. Ask Lance about the 'no cost' and 'low cost' refinance options as well. These options would actually lower and/or eliminate the closing costs incurred in refinancing. In terms of feasibility, the goal is to lower your monthly payments and interest rate enough to offset the costs incurred in refinancing. This is called the 'recapture' time or 'break even point'. For instance, if the closing costs involved in the refinance are $3,000 and your monthly payment will be reduced by $100 per month, the recapture time is 30 months (3,000 / 30). This means that you will truly be realizing the monthly savings after 30 months. When looking at your monthly budget, if you are able to save $100 per month or $1200 per year without spending any cash out of pocket, often times that is very appealing. However, if you are not planning on being in the loan/home for at least 30 months, a different loan program with a shorter recapture time may be needed. You may also consider changing the term of your mortgage loan. For instance, you may want to go from an adjustable rate mortgage to a fixed rate mortgage or from 30 year fixed rate to a 15 year fixed rate. Although the monthly payment may not be lowered, the overall interest savings may be large enough to warrant doing the refinance. For instance, if you are at an 8.5% 30 year fixed rate and go to a 6.5% 15 year fixed rate on a $100,000 loan, the payment actually would increase by $102.20, but you would actually save $2000 per year in interest. As Lance can offer many different packages for rate and term refinances, the goal is to find the right program that offers a recapture time that makes sense for your particular situation.

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Cash Out Refinances

A Cash Out Refinance is a refinance in which the equity built up in the home is taken out and given to you in cash. This is done for many reasons including to pay off higher interest rate credit card debt, to do home improvements, or just to invest that money in higher yielding financial options. The closing costs and pre-paid items incurred are taken from the cash out proceeds from the transaction. When paying off other debt with the proceeds from a cash out refinance, one must compare the overall savings when looking at the 'recapture' period. The monthly mortgage payments may increase with taking a larger loan amount, but when compared to what the existing mortgage payments and other debt payments are, often times the total monthly savings drastically lowers the monthly expense. The added tax benefit due to the deductibility of the mortgage interest is also something to consider. For instance, if your monthly mortgage payment is $1000 and your credit card debt adds up to an additional $1000 per month, you may be able to do a cash out refinance and increase your monthly mortgage payment to $1500 but also eliminate your monthly credit card debt. This would be a savings of $500 per month. If the closing costs were $3,000, then the recapture time would be 6 months. As long as you stay in the loan/home for at least 6 months, the refinance would be financially beneficial.
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Refinancing Process

Once you have decided to refinance your home, we will gather the necessary documentation for your new loan. The majority of the time, since we are creating a totally new mortgage for you, we will need much of the same documentation as you had to provide for the purchase of the home. You will be given a short checklist of these items to provide. It will normally include recent paycheck stubs, W2s, and bank statements. If necessary, an appraisal of your property will also be ordered and an appraiser will contact you to schedule an appointment to view your home. A new title search will also be ordered to ensure that there are no new liens or clouds against the title of your home, and payoffs of your current mortgage's) will be ordered.

Once all of that documentation has been received, one of our mortgage loan processors will call you and go over 'final figures' for such things as your mortgage loan payoff amount, insurance and tax impounds, etc. We will then schedule your closing at the title company with you and discuss if you will need to bring any additional documentation with you to the closing.

Your new loan is then submitted for the final underwriting approval, documents drawn and sent to the title company for your signatures. If this is your primary residence, after you sign you will have a 3 day right of rescission, meaning you have 3 days to change your mind and cancel the new loan transaction before the loan funds are disbursed and the new loan goes into effect. On the fourth day after you sign, the new loan is funded, documents recorded at the county recorder's office and all loan funds are disbursed accordingly.

If you are refinancing a second home or rental property, there is no rescission and your new loan funds immediately.
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Other Loan Programs