Mortgages Terminology Terms Last update: January 27. 2010 06:54:55

Location: Mortgages Mortgages ARM An adjustable-rate mortgage (ARM) starts with a considerably lower interest rate, but then adjusts every year. This type of loan moves a little bit of the risk away from the lender, and the lender rewards you with a lower rate. To protect you from a catastrophic increase in rates (such as when we experienced double-digit inflation during the late 1970s), ARMs are capped to rise not more than 2% in any year, and not more than five or six percent for the life of the loan. There are many types of adjustable rate mortgages available with enticing terms, including the Option ARM. Ask for details. Construction ARM (Lowest Start Interest Rate for 3, 5, or 7yrs) This program is very interesting. The borrower starts out with a very low aggressive rate for 3 or 5 or 7 years. The aggressive interest rate at first is the interest only interest rate. This will then turn into a permanent loan as the home is completed. Keeping the same interest rate for 3 or 5 or 7yrs. including principle & interest payments. IMPORTANT, you also have the option to go to a fixed interest rate 30 or 15 yr. Mortgage at the time your home is completed prior to moving in. The interest rate will be the prevailing rate at that time. If the fixed rate is attractive you lock-in if not, you just stay in your current aggressive start rate for term balance and then you can refinance if you so desire. There is a very small fee for this conversion, however it’s worth it! This program is the most flexible program for construction lending. Construction Interest Only The investor financing the loan lends out small portions of the funds to the builder. These funds are called draws. The borrower pays the interest only payment on the draw amount requested by the builder. Prior to each draw, the builder's work is inspected. Thirty days prior to completion , your loan is then locked into the permanent interest rate. Construction Fixed (locked-in interest rate) Much like the Construction Interest Only, you lock in your interest rate today and pay only .750% of the percent rate over your locked-in rate. This Payment is interest only during construction. Example: The locked rate____ + .750% = the interest only rate used by the investor to lend the builder the funds called draws. After the house is completed, the loan interest rate will then return to the original locked-in rate. Creative Financing Searching out the right loan program that will best fit your needs. When purchasing your new home, loan programs to help not only the Buyer but also the Seller & Realtor achieve a smoother closing and a reasonable sale price. Loan products with No Income or Asset Verification. 100% financing with No Mortgage Insurance added to your monthly payment. These are just a few examples to choose from, why not contact us for a complete run down of products. First Mortgage Purchase that New Home with up to 100% Financing, if you qualify. A- credit is not a denial, just a challenge to overcome! Jumbo Loans For those looking to build, purchase, or refinance from $ 320,000 to $ 10,000,000. Residential and Commercial Properties will qualify. Very low start rate programs are always available. Refinancing Interest Rates have not been this low in years! Lower your monthly mortgage payment and possibly receive the cash-out for the down payment on your first Investment Property to lease out for additional income. Debt Consolidation – this is the best way to make better use of your money. Consolidate several monthly obligations into one low monthly payment and start SAVING MONEY RIGHT AWAY ! Second Mortgage Mortgage your current home for that home improvement project. Equity lines of credit, you only pay your monthly payment based on the money you are using at that time. Also the option to make interest only payments or interest and principal payment, what ever is best for you on that month. Often, a "combo" loan (consisting of a first and a second mortgage) for a purchase can be used. VA 100% Financing (not yet available) 100% Financing with no mortgage insurance requirement. All we need is your certification of eligibility.