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Fixed Rate Mortgages

Fixed-Rate Conventional Mortgages are the easiest mortgage loans

for home buyers to understand. Commonly referred as the 30-Yr and 15-Yr mortgage loans, these loans have fixed interest rates and repayment amounts — the amounts never change.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages interest rate and monthly payment amounts are fixed for the life of the loan homeowners can budget how much they need each month for the mortgage payment homeowners like the stability of a product homeowners can easily understand how the product works

disadvantages interest rates are slightly higher than ARMs and other special mortgages the average homeowner does not remain in the home for the full 30 years, thus paying more financing charges than with other mortgage loans

Adjustable Rate Mortgages

ARMs Have Significantly Lower Interest Rates

than conventional fixed rate loans. ARM's adjust their rates up or down during a given period. That means that your monthly payment may go up or down during your repayment period.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages the big advantage of ARMs is the interest rate — which can be significantly lower than 30-year fixed rate mortgages many consumers select the ARMs when they know they will only remain in the home for three of fewer years homeowners use the ARM when they need to qualify for larger loan amounts ARMs are generally assumable which is a plus when homeowners plan to sell in the near future ARMs rates can decrease in declining interest rate markets making your loan payment even less some ARMs have a convertible feature that allows the borrower to convert the ARM to a fixed-rate mortgage

disadvantages the interest rate can fluctuate which makes it hard to budget your finances in rising interest rate markets, your monthly payment can increase significantly some ARMs allow for negative amortization — where caps prevent recovery of the full cost of the loan convertible features can be expensive and may charge a higher interest rate than current prevailing rates

Fixed Combo ARMs

Fixed Combo Loans are a Combination of Fixed Rate and ARM.

These ARMs attach a delayed adjustment period during which the initial period is fixed. Adjustable Terms hybrids start out at fixed rates loans, adjusting to ARM after a set period of years

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages gives the homeowner a lower rate than fixed-rate loans plus lower risk that the 1-year ARMs many consumers select the Hybrids when they know they will be in the home for a select period of time homeowners use the Hybrid to lower their rate and to qualify for larger loan amounts Hybrids and ARMs that are generally assumable which is a plus when homeowners plan to sell in the near future ARMs rates can decrease in declining interest rate markets reducing your loan payment

disadvantages hybrid rates are typically higher than 1-yr ARMs rates will adjust at the end of the initial period that could raise your payment interest rates will adjust annually after the initial period making it hard to plan your finances in rising interest rate markets, your monthly payment can increase significantly after the initial fixed-rate period

Interest-Only Mortgages

You Pay Interest-Only Payments on Your Mortgage Loan

for the first five or seven years of your 30-yr amortized loan. No principal payment is being made. The amount you payoff when you refinance is the amount you borrowed upon closing.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages you pay interest-only payments on your mortgage loan for the first five or seven years of your 30-yr amortized loan. lower monthly payments. you can afford your first home or a higher priced home by using interest-only loans. your monthly savings can be used to pay the principal or other debts.

disadvantages no principal being paid during the interest-only period. if home values decline, you could lose money. once the interest-only payment term expires (usually in 5-7 years), your monthly payment will increase substantially.

Low Monthly Payment Plans

Minimum Monthly Payment Plans are Designed

for homeowners who are looking to pay lower initial payments at the start with the expectation to refinance their mortgage later on. The minimum repayment plan usually expires after an initial period.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages generally the lowest monthly payments plans available in the market. designed for homeowners in high-priced markets. your monthly savings can be used to pay the principal or other debts.

disadvantages potential negative amortization that increases your total borrowed amount. once your initial period ends, your payments may increase 3-4 times.

Zero Down Mortgages

Lending Institutions have several mortgage programs

to help first-time home buyers. Generally these loan programs require less than 20% down payment — and in some case zero % down.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages first-time homeowners select these products when they want to get into their homes early without waiting to raise the 20% down payment these programs benefit all types of homeowners — those with investments, good credit, moderate income, etc.

disadvantages many of these loan programs limit the amount that you can borrow many of these programs require PMI insurance, which can add to the total monthly cost

Balloon Mortgages

Many lenders offer 3- and 5- and 7-year balloon periods with attractive low interest rates.

A Balloon Mortgage means that your monthly payments are based on any fixed term up to 30 or 15 years amortization. At the end of the balloon period, your remaining mortgage loan amount will come due.

Balloon mortgages are popular with people whose income is prone to fluctuate or who are not planning to stay in their home for more than 3, 5 or 7 years. It offers the security of a Fixed Rate Mortgage but at a lower rate.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages applicants are looking for a diversify way to finance their loan than the traditional fixed and ARM mortgages applicants expect their incomes to rise significantly in later years — so they are looking for a smaller monthly payment at first with expectation to afford larger payments in later years applicants are financing a large home purchase that requires nontraditional financing their needs require special financing many of these programs assist home buyers in special circumstances

disadvantages many of the Hybrid ARMs offer similar rates and terms there is risk of losing value if market conditions change these loans are less familiar than traditional loans and may confuse homeowners on loan management

Government-Backed Mortgages

FHA, VA, and other specialized programs are mortgage loans backed by the Federal government made to home buyers that meet certain requirements.

Generally these loans require less than 20% down payment — and in some with zero % down — and the interest rate is typically lower than normal rates on conventional loans.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

advantages these programs require less down payment than conventional loans interest rates on government sponsored programs are lower than conventional loans FHA / VA loan can be assumed under guidelines FHA / VA debt ratios are higher than conventional loans VA Loans can be issued with as little as zero down

disadvantages interest rates are slightly higher than ARMs and other special mortgages the average homeowner does not remain in the home for the full 30 years, thus paying more financing charges than with other mortgage loans

Other Mortgages Types

Other mortgage loan types that may be available upon request or applicant qualifications include:

Mortgages for Less-than-Good Credit:

Applicants with low credit scores that do not meet the credit requirements of Fannie Mae and Freddie Mac are referred to B, C and D mortgage loans. Sub-prime lenders underwrite B, C and D loans.

These loans are temporary loans until the applicant can qualify for conforming "A" loans. The interest rate on B/C loans varies, but are generally higher than conforming "A" loans.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

 

Jumbo Loans:

Jumbo Loans have loan balances that are above the maximum loan amounts established by Fannie Mae and Freddie Mac — thus jumbos are "non-conforming" loans.

Jumbo loans are used to buy large, expensive homes. The interest rates on jumbo loans are generally higher than rates on conforming loan

The fixed rate can range anywhere from 0.11 to 0.77 points higher, depending on the region.

more information at our mortgage lending center
(links open new window to our mortgage unit at www.PickMyMortgage.com)

 

Home Construction Loans:

Home construction lending is a little different than regular mortgage financing.

• First, you will be given a construction line that will used to pay subcontractors and suppliers who perform work and provide supplies during the construction.
  
• And then at the end of the construction project, you will use a residential mortgage to pay off the construction line.

  more information at our mortgage lending center
  (links open new window to our mortgage unit at www.PickMyMortgage.com)

 

Other Loans:

These loans may be available through some lenders — be sure to ask if they fit your financing objectives:

• pledged asset mortgages:
  targeted to buyers with sufficient income who want to pledge their investments as collateral instead of a making a cash down payment.
• buydown mortgages:
  these loans are temporary buydowns that initially start off with a discounted rate that gradually increases to an agreed-upon fixed rate.
• graduated mortgage:
  initial payments will be negatively amortized during the early years, then payments will rise as required to pay off the loan during the 15 or 30 year term. View "lower monthly payment" plans above
• 100+ home buying programs:
  you can borrow more money than the appraised contractual purchase price and use the extra money to pay closing costs. Homeowners use these loans when they don't have enough money for the down payment and closing costs.
• 40- and 50-year fixed mortgage loans:
  you can lower your monthly payment by extending your term to 40-50 years over the standard 30-year term. Homeowners use 40-50-year mortgages to buy a higher-priced home.
• reverse mortgages:
  

  these instruments are gaining popularity with older homeowners who want to use the equity in the home to supplement their income.

  The RAM is a special type of loan that works in reverse — the lender makes monthly payments to you based on the equity of your home.
  
  
  more information about these loans at our mortgage lending center
  (links open new window to our mortgage unit at www.PickMyMortgage.com)