1st mortgage loan programs include:
- Conventional Conforming
- Conventional Jumbo
Interest-only first mortgage loans. First Mortgage refinancing up to 90% of your home's value. Hybrid fixed-rate loans (30-year loans fixed for 3,5,7,10 years). 40-year terms down to 10-year terms
30-YEAR FIXED RATE MORTGAGE. This is a 30-year loan with an interest rate that will never change. As a result, your monthly payment will stay the same (except for taxes and insurance which always go up over time.) This is generally the best way to go unless you are sure that you will move in a few years. If the market rates for mortgages drop significantly after you have secured your new loan, you can always refinance at a later time.
20 -year fixed, 15-year fixed and 10-year fixed. These are the same as a 30 Year Fixed except the loan is paid off sooner. You will own your home in fewer years, but your monthly payment will be larger than a 30-year loan.
Adjustable Rate Mortgages (ARMs) -
Adjustable rate mortgages are, by definition, mortgage loans in which payments can and most often do, change, as the index upon which they are based, changes. (See glossary for LIBOR, 1-year Treasury, 11th district cost of funds [COFI], and MTA). This change then in turn causes the rate and payment to change based on both the index and the margin.
Adjustable rate mortgages can be set up in a varied number of ways. Virtually always based on a 30-year amortization.
3/1, 5/1 and 7/1 ARMs are set up in the same manner, with the rates staying fixed for 3, 5, or 7 years respectfully.
A version of the above is where the rates are set up on the same induces, but are set to adjust every 6 months instead of 12 months.
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