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Types Of Mortgage Loan Programs:
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What is a fixed-rate mortgage?
A fixed-rate mortgage is one in which the interest rate remains the same throughout the life of the loan. Borrowers often choose fixed-rate mortgages because they prefer a stable rate that is not subject to interest rate fluctuations. Keep in mind, no matter how much you prepay on this type of mortgage, the payment remains the same.
What is an ARM?
An ARM is an adjustable-rate mortgage, in which the interest rate changes periodically to reflect changes in a pre-determined index, such as a T-Bill, LIBOR or COFI. Borrowers often choose these loans because they offer a much lower initial interest rate than fixed-rate mortgages. ARM's usually remain fixed for a set number of months or years; after which, they adjust based on a pre-determined schedule (usually every month, six-months, or every year. Most ARM's have annual and lifetime caps on the interest rate to protect borrowers from excessive rate increases. BeechTree Mortgage provides numerous ARM programs to suit each client. Call us now to discuss your options. 1-888-399-0520.
An interest-only mortgage is one where the amount owed remains the same and the regular payments are made up solely of interest. At the end of the interest only period, the amount owed is the same amount as initially borrowed. Interest only loans are often used for investment property purchases or short term loans.
What is a conventional home loan?
A conventional loan is one not guaranteed by the Federal government. Instead, these mortgages are purchased on the secondary market by the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA) or the Government National Mortgage Association (GNMA). FANNIE MAE and FREDDIE MAC, which are quasi-governmental agencies, buy and sell large quantities of mortgages and work with financial institutions to obtain necessary capital. GINNIE MAE serves the equivalent role for government FHA and VA home loans.
What are conforming and non-conforming mortgage loans?
Conforming loans fall within FANNIE MAE and FREDDIE MAC maximum loan limits. On November 28th 2001, the conforming loan limits, set by The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) for single-family properties was increased to $300,700; visit Florida Mortgage Conforming Loan Limits. Loans which meet all other borrower and property requirements of these two agencies may also be described as conforming. Loan amounts above the $300,700.00 limit are generally considered non-conforming, and are sold as securities on the secondary market. Ask us about our Jumbo "Interest Only" programs for loans up to 5,000,000.00 with extremely low interest rates. Call now at 1-888-399-0520.
What are FHA and VA loans?
The Federal Housing Administration, or FHA, is a part of the Department of Housing and Urban Development (HUD) which insures participating lending institutions against loss from default on qualifying mortgages. Loans by the Veterans Administration, or VA, assist qualified veterans in purchasing homes by guaranteeing the lenders against default. BeechTree Mortgage has many programs available with very little or no down payments including VA, FLEX97%, and 103% financing. Compare these options as well.
What is equity?
Equity is the portion of your property's value that exceeds the amount of the mortgage or other liens on the property. You "build up" equity as your property value increases and as you pay down the principal on your mortgage. BeechTree Mortgage does not recommend borrowing more than 100% of your home's equity. Keep things in perspective. Call us for other alternatives at 1-888-399-0520
What is a home equity loan?
A home equity loan allows you to borrow money by offering the equity in your property as collateral for the new loan usually as a 2nd positioned mortgage. Unlike a fixed 2nd mortgage where the borrower receives a lump sum and makes fixed payments for a specified term (usually 15 years); the "Home Equity Line Of Credit" allows you to make payments only on what you draw out of the account.
What is a "B", "C", or "Portfolio" mortgage?
Mortgages which meet the usual standards for credit and property are typically called "A" paper mortgages. Loans which do not meet these standards are referred to as "B","C" or "Portfolio" type mortgages. The interest rates for these types of mortgage are generally higher than that of an "A" paper mortgage. If you are considering one of these mortgages, be cautious of any "pre-payment penalty".
What is a balloon loan?
A balloon loan is one which is amortized over a longer period than the term of the loan. Usually, a balloon loan has a term of five years, but is amortized over 30 years to keep monthly payments manageable. At the end of the five years, the borrower must repay the entire principal due on the loan in one lump sum, called a "balloon" payment.
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Beechtree Mortgage, Inc.
875 Clark Street, Suite B
Oviedo, Florida 32765
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