Types of Home Loans
Fixed-rate loans.
Fixed- rate loans are the most popular home loan.
They offer monthly payments that are
known and do not change. Most fixed-rate mortgages
are for loan terms of 15 or 30-years. A 30-year loan
has lower payments but a slightly higher interest
rate.
Adjustable-rate loans (ARM).
The Interest on ARM loans is not fixed and re-sets
periodically. Popular with first time home buyers
who plan to re-finance or move within three to five
years. ARM feature low initial interest rate.
Convertible mortgage
loans. These are ARM loans that allow
you to convert to a fixed-rate loan at or before a
specified time. The conversion privilege lets you
start off with a low variable rate, then lock in
when fixed rates drop low enough.
Balloon mortgage
loans. These loans often have
interest-only payments. .
FHA Loans.
FHA loans have
lower down payment requirements and are easier to
qualify for than conventional loans. Down Payments as
low a 3 percent. The borrower must pay mortgage
insurance with FHA insured loans.
VA Loans
VA loans are guaranteed by U.S. Dept. of Veterans
Affairs. The guaranty allows veterans and service
persons to obtain home loans with favorable loan terms,
usually without a down payment. In addition, it is
easier to qualify for a VA loan than a conventional
loan.
Non Conforming
Loans do not follow FHA/VA conventional
lending guidelines. They are tailored for specific
financial situations.
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