MORTGAGE LOAN PROGRAMS
Navigating through the many types of mortgage loans offered can be confusing, time consuming and frustrating. We've sorted through the mortgage products and have provided brief summaries of the most commonly used mortgage loan programs below. We understand that everyone's needs are not the same and have several additional mortgage loan programs to offer. Feel free to consult with one of our mortgage specialists to inquire about some of our other programs that would be a better fit for your financial needs.
Fixed Rate Mortgages (FRM)
This is the most common type of mortgage loan option which features a fixed monthly principal and interest payment which never change during the life of the mortgage loan. Regardless of how much interest rates fluctuate during the life of the mortgage loan, the borrower will pay the same interest rate for the entire fixed period. Because of the stability that fixed rate mortgages offer, many first time home buyers opt for this type of mortgage loan.
Fixed rate mortgages are available in terms ranging from 10 to 30 years and can be paid off at any time without penalty. The two most common terms that are offered are the 15 year fixed and the 30 year fixed mortgage products. In addition, the terms and conditions of a fixed rate mortgage are generally more straight forward and easier to understand than some of the other mortgage products offered.
Adjustable Rate Mortgages (ARM)
These are mortgage loans whose interest rate can vary during the mortgage loan's term. Adjustable Rate Mortgages are offered as a hybrid product with a fixed interest rate for a specified initial period of time and then can adjust after this fixed expiration date based on the current market conditions. Adjustable Rate Mortgages can be offered as a fully amortized mortgage product, where the principal and interest is being paid or as an interest only payment where only the interest is paid.
Interest rate fluctuations with this type of mortgage loan are linked to an economic index, most commonly the 1-Year Treasury Security or the LIBOR. However, these mortgage loans provide adjustment caps that protect the borrower against any potential increases in their monthly payments. Although there are some inherent risks associated with this product, many experienced homeowners opt for this product because of the initial lower mortgage interest rate.
Government Loans (FHA, VA, and USDA)
Government mortgage loans are mortgage loans that are partially or fully insured or guaranteed by a government owned and operated agencies. Three types of mortgage loan products that we offer are the FHA, VA and USDA mortgage loans, insured or guaranteed by the Federal Housing Administration, Veterans Affairs, or the United States Department of Agriculture, respectively.
These mortgage products typically require little to no down payment on a home purchase and may be ideal for first time home buyers and others that do not have the financial means to make large down payments. Because these buyers may be using a smaller down payment, these mortgage loans are typically insured or guaranteed by these agencies by requiring a monthly insurance premium or a guarantee fee to be paid with the mortgage loan.