Adjustable Rate Mortgage (ARM)
· 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 Buyer's Program
· A fixed rate for first time home buyers with a low down payment usually 3% - 5%, no cash reserve requirement, 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 low down payment and are easier to qualify for than conventional loans.