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Types of Loans

 

Adjustable Rate Mortgage

 
Adjustable rate mortgages have an interest rate that is adjusted at certain intervals based on a specific index during the life of the loan.
 

Balloon Payment Loan

 
A fixed rate loan that is amortized over 30 years but becomes due and payable at the end of a certain term. May be extended or may roll-over into another type of loan.
 

Buy-Down Loan

 
Buy-Down Loans are fixed rate loans where the interest rate and the payment are reduced for a specific period of time by passing the interest up front to subsidize the lower payment.
 

Community Home Buyers Program

 
A fixed rate loan for the first time home buyer with a low down payment usually 3-5 %, no cash reserve requirements and easier qualifying ratios. Qualification is subject to borrower meeting income limits and attendance of a four hour training course on home ownership.
 

Conventional Loan

 
Conventional loans are sometimes more lenient with the appraisal and condition of the property. When you are buying a “fixer upper” you may need to use a conventional loan.
 

FHA Loan

 
FHA loans are insured by the Federal Housing Administration under H.U.D. They offer a low down payment and are easier to qualify than conventional loans.
 

Fixed Rate Loan

 
A fixed rate loan has one interest rate that remains constant throughout the life of the loan.
 

Graduated Payment Mortgage

 
A fixed rate loan that has payments starting lower than a standard fixed rate loan, which then increases by a predetermined amount each year for a set number of years.
 

Mortgage Credit Certificate

 
A first time home buyer program is subject to purchase price and income limits to some areas. It is actually a special tax credit and assists the buyer in qualifying for many loan programs.
 

Non-Qualifying Loan (assumable)

 
Non qualifying loans are pre-existing loans which can be assumed by a buyer from the seller of a property without going through the qualifying process. The buyer pays the seller for their equity and then starts making payments.
 

VA Loan

 
VA loans are guaranteed by the Veterans Administration. A veteran must have served 180 days of active service. The maximum VA loan is currently $203,000 with no down payment.



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