FAQ'S

LOAN PROGRAMS

When it comes to home loans, there are hundreds of programs available to choose from.   Below are some of today's most popular programs.

30 Year Fixed Rate
A fixed rate and payment for 30 years. The payment will not change for the entire duration of the loan even if interest rates rise. However, fixed rate mortgages usually carry a higher rate than adjustable rate mortgages.  

15 Year Fixed Rate
A fixed rate and payment for 15 years. The payment will not change for the entire duration of the loan even if interest rates rise. By paying off your loan over 15 years, instead of 30, you will build equity in your home at a more rapid rate.   15 year loans also offer rates that are significantly lower than 30 year loans.   However, fixed rate mortgages generally carry a higher rate than adjustable rate mortgage and your payment will be larger since your loan will be amortized over 15 years.


Pay Option ARM
These loans offer super-low introductory rate and payment. The interest rate adjusts monthly, but the payments are based on the introductory rate for the first year.   The minimum required payment will increase after this period. You have the flexibility of up to three different payment options with this program to help you meet your monthly financial needs. Your monthly options may include a fully amortizing payment, an interest-only payment or the minimum payment, which is initially based on the low introductory rate. The interest rate is adjustable after the introductory term. This loan has potential for negative amortization depending on the actual rate and payment choice. In other words, your balance may increase over time rather than decrease, if your minimum payment does not exceed the amount of interest due.

 
3/1, 5/1, 7/1 and 10/1 LIBOR ARM 's
These loans have a fixed rate and payment for the first 3, 5, 7 or 10 years that is based on the LIBOR (London Interbank Offered Rates) index. After that, the rate and payment adjusts annually. The rate increase or decrease is capped each year during the adjustable period of the loan and there is a lifetime cap that sets a maximum limit for the rate over the term of the loan. Your rate and payment for this loan is generally less than fixed rate mortgages.   If you intend to sell or refinance your property within the next few years this may be a desirable loan to select.   If you retain your property or do not refinance this loan before the fixed period expires, you are subject to the adjustable rate. Your rate and payment may increase significantly depending on interest rates at that time.

2/6, 3/6, or 5/6 LIBOR ARM
This loan has a fixed rate and payment for the first 2, 3 or 5 years that is based on the LIBOR (London Interbank Offered Rates) index. After that, the rate and payment adjusts every 6 months. The rate increase or decrease is capped each year during the adjustable period of the loan and there is a lifetime cap that sets a maximum limit for the rate over the term of the loan.   Your rate and payment for this loan is generally less than fixed rate mortgages. If you intend to sell or refinance your property within a few years this may be a desirable loan to select. If you retain your property or do not refinance this loan before the fixed period expires, you are subject to the adjustable rate. Your rate and payment may increase significantly depending on interest rates at that time .

 
6 Month ARM
This loan has a fixed rate and payment for the first 6 months after which the rate and payment adjusts every 6 months. The rate increase or decrease is capped at each rate change during the adjustable period of the loan and there is a lifetime cap that sets a maximum limit for the rate over the term of the loan. The adjustable rate is based on the LIBOR index plus a margin. Your initial rate and payment for this loan are significantly less than fixed rate mortgages.   If you intend to sell or refinance your property within 6 months or feel that rates will remain the same or decrease this may be a desirable loan to select.   If you retain your property and do not refinance this loan within 6 months, you are subject to the adjustable rate. Your rate and payment may increase significantly depending on interest rates at that time.


Home Equity Line of Credit (HELOC )
This is a line of credit that is secured as a second mortgage or in some cases a first mortgage on your property. This loan offers a maximum line of credit that can be drawn against and repaid over the first 10 years and the remaining balance is then paid off over the remaining 10 or 15 year period. You may access the credit line by a checkbook or a credit card that will be issued to you and there are flexible payment options as well. Your balance will not decrease as fast as it would with a fully amortized loan if you make only minimum payments. The rate is adjustable and may change monthly.

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