With so many different types of mortgages available, it can be difficult deciding on which option is right for you.
Below are the most common types of non-commercial mortgages.
Click on a title or "Read more..." link to visit that page for more information.
Adjustable Rate Mortgages:
An adjustable rate mortgage is one where the interest rate charged is linked to an economic index.
If the index goes up; the interest rate charged on the mortgage will increase (advantageous to the lender) but if the index goes down,
then the interest rate charged will go down (advantageous to the borrower). Read more...
Balloon Loans:
A balloon loan is one that is not fully amortized over the loan period. Because the principle is not fully paid off over the term of the
mortgage, a "balloon" payment is required at the end of the period to fully pay it off. Read more...
Buydown Mortgages:
A buydown mortgage is a type of mortgage where the buyer attempts to obtain a lower interest on the mortgage. Some buydown mortgages are temporary
lasting for periods of one to five years, while some buydown mortgages are for the entire duration of the mortgage.
Read more...
Conforming Loans:
A conforming loan is equal to or less than the industry standard for loan limit guidelines, and is therefore eligible for Fannie Mae
or Freddie Mac assistance. This standard is set by Freddie Mac and Fannie Mae, as they are the two largest secondary
mortgage lenders in the country. The amount is adjusted yearly to accommodate market conditions.
Read more...
FHA Loans:
An FHA loan is one that is guaranteed buy the Federal Housing Administration (FHA) against defaulting by the borrower. There are limits to the
amount that can be borrowed dependent on the area the house is in, but they are large enough for the purchase of a moderately sized house almost
anywhere in the country. Read more...
Graduated Payment Mortgages:
A graduated payment mortgage is a type of mortgage in which the payments increase over the first part of the mortgage term (5 to 10 years) and then
remain at the higher rate for the duration of the mortgage.
Read more...
Jumbo Loans:
A jumbo loan is a loan that exceeds industry standards for loan limit guidelines and is therefore ineligible
for Fannie Mae or Freddie Mac and/or most housing assistance programs. The opposite of a conforming loan (see above).
Read more...
Two-Step Mortgages:
A two-step mortgage, sometimes called a hybrid mortgage or a reset mortgage, is a mortgage that has two interest rates during the term of the mortgage.
The total length of the mortgage is generally 30 years, but it is divided into two parts.
Read more...
VA Loans:
A VA loan is a loan made to those who have served in the U.S. military as well as an unmarried surviving spouse of a veteran who died on active
duty or as the result of a service-connected disability. VA guaranteed loans are made by private lending institutions such as banks, saving
and loan associations, credit unions and mortgage companies.
Read more...
