If you're overwhelmed by all the options, here are a few definitions that may help you navigate sea of financing options.

The interest rate on a fixed-rate mortgage never changes throughout the life of the loan. You make the same payment each month until the loan is fully amortized and paid off. The most common fixed-rate mortgage is a 30-year loan. Fixed rates also come with terms of 10, 15, 20 and 25 years. The advantage of a fixed-rate mortgage is that it provides maximum long-term rate security. Typically, it's the best program for people who do not plan to move or refinance their mortgage for at least 10 years. Otherwise, an adjustable rate mortgage (ARM) may be better.

An adjustable rate mortgage (ARM) offers an interest rate and payment that remains the same for a fixed period of time, usually 1, 3, 5, 7, or 10 years, and then adjusts at fixed intervals throughout the remaining term of the loan. Typically, these adjustment intervals occur every 1, 3, 6, or 12 months, with 12 months being most common. Most ARM products adjust by adding a margin (commonly 2.75) to an index yield (for example, the 1-year treasury securities index) to determine the new interest rate and payment. Most ARMs also provide some "rate shock" protection by capping the potential rise in interest rate at each adjustment interval (usually capped at 2%), and during the life of the loan (usually capped at 6%). Since ARMs are typically offered at lower interest rates than fixed-rate loans, they can benefit people who plan to stay in their home for less than 10 years. They are also advantageous for people who think they may be refinancing within 10 years, or those who expect their income to increase over the next few years.

(From $252,701- $1 million +/single family/condo, primary residence, and second homes)

A jumbo or non-conforming mortgage loan is any loan higher than $252,700. Jumbo loans, like conforming loans, are available as fixed-rate mortgages or as ARMs. Typically, jumbo loans are priced slightly higher than conforming loans (usually .125 or .250% on interest rate) because fewer lenders are willing to loan that much money.

Government loans are guaranteed by one of two federal agencies, allowing lenders to lend mortgage money with very little risk. While the government doesn't lend the money, they do guarantee repayment to the lenders to protect them from loss in case of loan default and subsequent foreclosure. Loan limits on government loans vary from region to region around the country. Contact one of our Loan Officers for current loan limits.

Federal Housing administration or FHA loans are administered by the Department of Housing and Urban Development (HUD). FHA loans are offered as both 15- and 30-year fixed-rate mortgages and 1-year ARMs. The primary advantages of FHA loans are their low down payment requirement and their less stringent qualification requirements. Although FHA loans are not restricted to first-time homebuyers they are well suited for the first-time buyer. The FHA 1-year ARM is particularly appealing due to its adjustment interval cap of 1% (vs. 2% on most conforming ARMs) and its lifetime cap of 5% (vs. 6% on most conforming ARMs).

Veterans Administration of VA loans are made available to eligible veterans or the surviving spouse of a deceased veteran. These loans do not require a down payment; meaning financing is allowed up to 100% of the purchase price of the home being purchased. Like FHA loans, VA loans offer flexible qualifying guidelines. All government loans require a form of mortgage insurance, regardless of down payment.

These are loans on 1-4 unit properties that are being purchased as rentals for investment purposes rather than as primary, owner-occupied residences. Traditionally, these mortgages required a 30% down payment, but in recent years alternatives have been introduced that require as little as 10% down.

There are several varieties of the "no-doc" loan today. The type of loan that is best suited for a particular borrower depends on that borrower's situation. Some borrowers choose not to disclose employment, income or asset information, while others may be willing to disclose employment and asset information but not income. Still others might be willing to disclose income but want a program that doesn't calculate debt-to-income ratios allowing them to exceed the traditional guidelines in order to qualify for a larger mortgage. With all the different variations of the no-doc loan, there is definitely a mortgage program for today's non-conventional borrowers.

These specialty loans are designed for the borrower who needs less stringent qualifying guidelines than the conventional borrower. Sometimes portfolio loans are needed because of a non-conforming property, sometimes the borrower has had some past credit issues or special circumstances. A non-conforming property for example, might be a seasonal cottage or a property that is being purchased as a residence but that is zoned for commercial use. Portfolio loans fit a lot of niches and are often a good solution to a potential deal-breaking problem.

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