What are some of the different types of mortgage programs?
There are several types of adjustable rate and fixed rate mortgage loans. Here are
some of the more common loans:
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30-year fixed rate mortgage
This is a conventional mortgage which provides for a fixed interest rate and level payments for the 30-year life of the loan.
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15-year fixed rate mortgage
The 15-year loan is a conventional mortgage in which the borrower will pay fixed monthly payments for the life of the loan.
With a 15-year loan, payments are higher than a 30-year loan, but the loan is paid off much faster.
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1, 3, 5, 7, 10 adjustable rate mortgages
These types of mortgage programs allow you to carry a fixed interest rate for a specified amount of time. Once
that time is up, you will assume an adjustable rate for remaining life of the loan. For example, if you choose a 3 year
adjustable rate mortgage, you would have a fixed interest rate for the first three years of the loan and an adjustable rate for the remaining years.
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10/1, 7/1, 5/1, 3/1 treasury ARMs
These loans provide for a fixed interest rate for a specified amount of time. After that you pay a variable interest rate
with annual adjustments. For example, if you selected a 10/1 Treasury ARM loan, you would have a fixed interest rate and
fixed monthly payments for the first 10 years of the loan. The remaining life of the loan would assume a variable rate annually.
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3-year, 1-year, 6-month treasury ARMs
This type of loan applies adjustments to the interest rate payments in various ways. For example, if you selected the 6-month option, your
interest rate would adjust every six months. In comparison, if you selected the 3-year option, your interest rate would adjust every 36 months.
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Jumbo loan programs
These mortgages allow you to borrow more than an amount set by the Federal National Mortgage Association. As of January 1, 1999 any loan over $240,000 is
considered a Jumbo Loan.
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Conventional loan programs
Any loan that allows you to borrow within the amount set by the Federal National Mortgage Association. Currently, loans under $240,000.