Home Loan Types and Loan Programs

Fixed Rate Mortgages
Fixed rate home loans are available for 30 years, 20 years, 15 years and even 10 years. It is also most common type of home loan program where your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable. Fixed rate home loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30-year mortgages.

Adjustable Rate Mortgages
An adjustable rate mortgage is a variable rate mortgage or floating rate mortgage. It is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. This is done to ensure a steady margin for the lender, whose own cost of funding will usually be related to the index. Consequently, payments made by the borrower may change over time with the changing interest rate. With that being said the term of the loan may change.

• 10/1 ARM
• 7/1 ARM
• 3/1 ARM
• 1 year ARM
• 6 month ARM
• 1 month ARM

Balloon Mortgages
This is a special type of short-term mortgage loan, based on traditional fixed-rate mortgage guidelines, with a low interest rate similar to an Adjustable Rate Mortgage. Loan terms are usually fixed 5, 7 or 10 years, with principal and interest amortized over 30 years. At the end of the balloon mortgage term (maturity date), a final lump sum payment is due for the remainder of the loan balance, called a balloon payment.

First Time Buyer Programs
First Time Buyer Programs are a great way for those buying their first home to get better rates, make smaller down payments and buy more home. To minimize closing costs, many first time homebuyer programs include financial aid. This financial aid is also used in many cases to reduce the size of the down payment required.

Stated Income Programs
A stated income mortgage program is a form of mortgage loan program that is part of a family of low-doc and no-doc loans, meaning little or no documentation is required for the loan. A conventional mortgage loan requires lots of documentation or full-doc including a list of all creditors, last two or three paycheck stubs, W-2s and returns on income tax for the past two years, bank statements going back two months, and legal documents in case of bankruptcy or family misadventure.

No point, No fee Programs
This program works well if you are limited on the funds you have to close and need assistance with the closing costs by incorporating those costs into the loan.

Imperfect Credit Programs
Imperfect Credit Programs are for re-establishing credit if you pay your mortgage on time. When used for debt consolidation, you may be able to reduce your monthly debt payment.

Home Equity Line of Credit
A home equity line of credit is like a special checking account that taps into the equity in your home, allowing you to make improvements, pay for education, buy a car or whatever you want. It’s just like a credit card, but the interest is tax deductible.

Home Equity Fixed Loan
Fixed-rate home equity loan provides a second, lump-sum payment to the borrower, which is repaid over a set period of time at an agreed-upon interest rate. The payment and interest rate remain the same over the lifetime of the loan. Sometimes classified as a 2 nd mortgage.