Mortgage Loan Types...

Mortgage 101?

A mortgage, also referred to as a home loan, is a loan or lien on a property that has to be paid back according to certain terms.  There are many different types of mortgages, each with pros and cons, so it is important to perform some due diligence to ensure you are getting the best type of mortgage based on your situation and goals.
Understanding the benefits of different mortgage offerings can be a complex process. How do you figure it all out?

• Evaluate a fixed-rate mortgage
• Understand Adjustable-Rate Mortgages
• Learn about a Consolidation Loans
• Read about the different types of Refinancing Programs

Once you have identified the type of mortgage that is best for you, simply submit our pre-qualification form and we will walk you through the rest of the process.

Fixed-Rate Mortgages

With a fixed-rate mortgage is a home loan in which the interest rate will remain the same through the life of the loan.  Typical terms are 15-year, 20-year, 30-year, and 40-years.

• Low fixed Rate
  It is estimated that over 1 trillion dollars will be adjusting in 2007 to higher interest rates.  This means that many homeowners are going to find they are no longer able to afford their mortgage payment.  By refinancing to a low-fixed rate mortgage not only should you save money now, you also don’t have to be concerned with future rate increases, giving you inflation protection.

• Inflation protection.
  With a fixed-rate mortgage you are not as susceptible to rising interest rate.  So even if your taxes, insurance, and other unavoidable expenses go up, at least you can rest easy knowing your mortgage payment should remain level.
  Apply Now

Consolidation/ Combo Mortgages

A Mortgage Debt Consolidation Loan (also referred to as a COMBO LOAN) can be a great vehicle to pay off existing higher interest loans, home improvements, education expenses, and medical bills.  However, it is important to know the difference between secure and unsecured debt and to always make well-informed and educated financial decisions.

A combo loan is a process of combining a first and second mortgage and giving the borrower more than a 100% LTV.  The benefit to the borrower is they can consolidate and refinance all their debts (credit cards, car loans, medical bills) and mortgages and reduce their combined interest rates and lower their monthly payments.  Apply Now

Adjustable- Rate Mortgages

Adjustable-rate mortgages (ARMs) are home loans that start with a lower interest rate and a lower monthly payment for a preset term, after which they are subject based on a standard financial index.  It is important to read all the details of your Adjustable Rate Mortgage proposal/loan agreement before signing any documents.  It also important to perform some due-diligence, consider speaking to a CPA or Financial Advisor, to ensure that a ARM is best for your situation.

• Adjustment periods.
  The Preset Term is an initial fixed-rate period during which the interest rate doesn't change.   For example, with a 3/1 ARM, your interest doesn’t fluctuate the first 3 years.  The second number is how often each year, after the preset term, that the rate can adjust each year over the life of the loan Typical ARMs are 10/1, 7/1, 5/1 and 3/1.
  
• Caps, ceilings, and floors.
  All ARMs have rate caps, also known as ceilings and floors. Caps decide how much the interest rate can increase or decrease at each adjustment period and over the life of the loan. Most ARMs have a lifetime cap that limits the amount your interest rate can increase over the life of your mortgage.  Sometimes these are referred to as minimum and maximum monthly payment instead of rate caps.

Because the initial interest rate is usually lower than a fixed-rate mortgage, your initial payments will be lower and you may qualify for a larger mortgage amount.  However, you need to be conscious of the fact that as the mortgage adjusts your monthly cost is likely to increase.Apply Now

Mortgage Refinancing

Refinancing of a mortgage is when a borrower elects to repay of an older mortgage with a newer mortgage. Homeowners typically refinance for one of two reasons:

To take advantage of lower interest rates or
To get cash out of their equity

Analyst predict over $1 trillion in ARMs resetting in 2007, and many of these ARMs are likely to be refinanced in order to obtain a lower rate.  However, before you decide to refinance you need factor in the cost of any pre-payment penalties that are likely to exist with your current mortgage. Apply Now