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Fixed Rate Mortgage
 A fixed rate means the payments remain the same over
the life of the loan.
The terms are 15, 20 or 30 and 40 years.
The advantage of a fixed rate is the monthly payment
remains the same. The payment won’t go up if
interest rates go up. However, if you escrowed your
insurance and taxes into the loan, the payment may
rise a small amount each year, due the increase in
your taxes and insurance.
If the interest rates drop, you may want to
refinance your loan in order to get a lower interest
rate.
Adjustable Rate Mortgage
An adjustable rate ARM stays at a fixed rate for the
first two, three or 5 years, before converting to an
adjustable rate mortgage for the remainder of the
term. The rate adjusts once a year based on the
current rate index.
Why would I want an
adjustable rate loan?
- An adjustable rate loan most often
allows you to get a lower interest rate for
the first 2-5 years of the loan. If your
credit score is not great, then you might
want to get an adjustable rate loan, then
refinance in a couple of years when you have
improved your credit score.
- If you plan to sell your house in a
few years, and prefer the lower interest
rate before you sell your home.
- Get the low rates you may have missed if
rates have recently gone up.
- Enjoy lower monthly payments.
80/20 Combo Loan
An 80/20 Combo loan avoids the need for PMI (Private
Mortgage Insurance).
Seller-held Second
A seller-held second loan allows buyers to conserve
cash.
2/1 Rate Buy-Down
2/1 Buy-downs allows the borrower to have lower
mortgage payments the first 2 years of the loan.
TYPES OF LOAN APPROVALS
- Full doc:
Full doc gives you the best rates and
highest LTV and requires you to prove your
income and assets.
- Limited doc:
Limited doc requires you to prove your income
and assets with limited documentation.
- Stated income:
Stated income, stated assets does not require
proof of income and assets other than
verification of employment. (You must prove
employment)
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