HOME LOAN TYPES

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FIXED-RATE MORTGAGE (FRM)
A Fixed-Rate Mortgage (FRM) has a fixed interest rate for the entire length of the mortgage term. Fixed-rate mortgages are typically available in both 30 and 15 year terms. The 30-year fixed rate mortgage is the most common type of mortgage people usually apply for

You have a more consistent monthly payment and you don’t have to worry about rising interest rates.

The monthly payment stability will make budgeting easier.

If rates decrease, you can refinance the mortgage into a lower rate.

  • You plan to live in your house for more than five or ten years.

    You want relatively consistent monthly mortgage payments.

    You want to be able to budget effectively for the long term.
 
ADJUSTABLE RATE MORTGAGE (ARM)
An Adjustable Rate Mortgage (ARM) is usually initially fixed for a set period of time, followed by periodic adjustments according to a specific benchmark. There are various factors that determine the interest rate changes including market conditions, financial index and a margin.

Typically, you are offered a lower interest rate early in the loan term which equates to lower monthly payments.

You can take advantage of falling rates without having to refinance.

You may end up with a lower monthly payment if rates drop. Rates may never go below your floor rate as outlined on your Note.

You have plans to move within the initial locked-in period.

You have a lump sum of money coming your way before it adjusts where you could pay the house off at that time or significantly reduce the principal.

You plan on utilizing the payment savings to aggressively pay down principal.

OTHER LOAN TYPES
A conventional mortgage refers to a loan that is not insured or guaranteed by the federal government. Conventional loans are designed for good-to-great credit and income consumers, who have money saved up for a down payment.

For loans with 20% equity / down payment, there is no mortgage insurance required. For loans with LTV’s higher than 80%, the mortgage insurance premium is cheaper than FHA loans. “Cash-out” loans up to 80% of the home’s value.

FHA mortgages are loans that are insured by the Federal Housing Administration. Popular among first-time homebuyers, FHA loans are designed for low-to-moderate income consumers.

FHA loans typically have a more relaxed credit requirement than conforming loans. Down payment requirement is as little as 3.5%. “Cash-out” loans up to 85% of the home’s value.

VA loans are guaranteed by the United States Department of Veterans Affairs. They offer long-term financing to eligible American veterans or a surviving spouse of a veteran.

No down payment is required, and up to 100% of the purchase or refinance of a home can be offered.

The HARP program allows people who have loans that have been guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009, with little or negative equity to refinance and take advantage of the current low interest rates.

Available for homeowners that owe up to 150% or more than their home is worth (LTV ratio). HARP loans are available for primary residences, second homes, and investment properties.

USDA loans are guaranteed by the United States Department of Agriculture. These loans (also known as Rural Development loans) are designed to help low-to-moderate income consumers purchase homes in rural areas.

USDA loans often don’t require a down payment and provide up to 100% for a home purchase or refinance (rate and term only if existing home is insured by USDA, and no-cash outs).

Loans that exceed the conforming loan limits set by Fannie Mae and Freddie Mac are known as Jumbo loans.

Fixed and adjustable rate terms available. Loans available up to $3 million.

These are first mortgage loans that can be made on a consumer’s primary residence, second home or investment property. LTV is based on the after completion value of the home.

The Justus Sharp Team of NFM Lending
1660 Gateway Circle
Grove City, OH 43123

(614) 369-4838

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