Fixed Rate Mortgages
The traditional fixed rate mortgage is the most common tyoe if loan programs, where monthly principal and interest payments never change during the life of the loan.
Adjustable Rate Mortgages (ARM)
Adjustable Rate Mortgages (ARM)'s are loans whose interest rate can vary during the loan's term. These loans usually have a fixed interest rate for an initial period of time and then can adjust based on current market conditions.
203k Loans
These are FHA loans that will allow a Buyer to roll into their financing the cost to Rehabilitate a home that they want to purchase. Some Restrictions apply so call to find out the restrictions prior to making any offer
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages, also called fixed-period ARMs, combine features of both fixed-rate and adjustable-rate mortgages.
Interest Only Mortgages
A mortgage is called “interest only” when its monthly payment does not include the repayment of principal for a certain period of time.
Components of an ARM
To understand an ARM, you must have a working knowledge of its components. You have a fixed period followed by an Adjustment period. Fixed periods of the interest rates very upon programs and can range from 1-10 years in fixed portions
Commonly Used Indexes for ARMs
Here is a list of the most commonly used indexes by ARM lenders. These indexes are used when the term of the initial Fixed Rate is over.
● Daily LIBOR & Monthly LIBOR (Most common)
● Treasury Constant Maturities (TCMs / CMTs)
● Federal Reserve H.15 values
● APOR values
● Federal Cost of Funds
● 11th District Cost of Funds
● Prime Rate & Bank Prime Loan
● Discount Rate
● Freddie Mac & Fannie Mae RNYs
● National Mortgage Rates
● MTA, CODI, and other 'derived' indices
● State Usury Rates
● First mortgage pricing
● Historic index rates going back decades
● Other Indexes Available - just ask
Balloon Mortgages
Balloon mortgages have a note rate that is fixed for an initial period of time, and then the remaining principal balance is due at the end of the term.
Reverse Mortgages
Reverse Mortgage 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 are not that prevelant in our Market.
Graduated Payment Mortgages
Graduated Payment Mortgage is a loan where the payment graduates (increases) annually for a predetermined period (e.g. five or ten years), and then becomes fixed for the duration of the loan.
What kind of loan program is best for you?
So what kind of mortgage is best for you? Fixed rate? Adjustable rate? Government loans? The truth is, there is no one correct answer.
