Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that can change periodically based on market conditions.

Amortization: The process of gradually paying off a mortgage through regular payments.

Closing Costs: Fees associated with the home-buying process, typically ranging from 2-5% of the purchase price.

Debt-to-Income (DTI) Ratio: The percentage of monthly gross income spent on debt payments, including the proposed mortgage.

Earnest Money: A deposit made by a buyer to demonstrate commitment to purchasing a property.

FHA Loan (Federal Housing Administration): A government-insured loan with more lenient credit and down payment requirements.

Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant throughout the loan term.

Home Equity: The difference between the market value of a property and the outstanding mortgage balance.

Interest Rate: The percentage at which interest is paid on a mortgage.

Jumbo Loan: A mortgage exceeding conventional loan limits, typically $510,400.

Loan-to-Value (LTV) Ratio: The percentage of the home's value borrowed, calculated by dividing the loan amount by the purchase price.

Mortgage Broker: An intermediary between borrowers and lenders who facilitates mortgage transactions.

Mortgage Insurance (MI): A policy protecting lenders against borrower default, often required for low down payments.

Net Operating Income (NOI): Gross income from rental properties minus operating expenses.

Origination Fee: A lender's charge for processing a mortgage application.

Pre-Approval: A lender's preliminary approval for a mortgage based on creditworthiness and income.

Qualifying Ratio: The percentage of income used to determine borrowing capacity.

Refinancing: Replacing an existing mortgage with a new loan, often to secure better terms.

Secondary Financing: Additional financing secured by the same property.

Title Insurance: Protection against errors or defects in property ownership.

Underwriting: The lender's review and approval of a mortgage application.

VA Loan (Veterans Affairs): A government-guaranteed loan for eligible veterans.

Warranty Deed: A document transferring property ownership with guarantees.

X-date (Maturity Date): The final payment date of a mortgage.

Yield Spread Premium: Compensation paid to mortgage brokers for securing favorable interest rates.

Zero-Down Mortgage: A mortgage requiring no down payment, often reserved for specific government loans.

FHA stands for Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD). Here are some key points about FHA:

- Provides mortgage insurance on loans made by FHA-approved lenders
- Protects lenders against losses if a property owner defaults
- Offers better loan terms to borrowers, such as lower down payments and closing costs
- Has been helping people become homeowners since 1934
- Has various loan products, including options for energy-efficient mortgages and mobile homes
- Has a reverse mortgage option for seniors aged 62 and older

An ITIN loan is a type of mortgage loan available to individuals who do not have a Social Security number. Here are some key points about ITIN loans:

- ITIN stands for Individual Taxpayer Identification Number, which is issued by the IRS.
- ITIN loans are designed for individuals who do not have traditional documentation for mortgage loans.
- To apply for an ITIN loan, you will need to work with a lending institution that offers these types of loans.
- ITIN loan requirements vary by lending institution.
- ITIN loans may be available for various types of properties, including single-family homes, condos, townhomes and multiple units in residential buildings.
- The ITIN loan program is designed to make homeownership more accessible to underserved communities.

Yes! individuals with a green card can purchase a home in the United States. Here are some things to consider when looking to buy a home with a green card:

- Financing Options: Many financing options are available to green card holders, including conventional mortgages, FHA loans and loans from private lenders ¹.
- Down Payment Assistance Programs: There are various down payment assistance programs that can help green card holders with grants, low-interest loans and forgivable loans ¹.
- Non-Citizen Loan Programs: Some lenders offer loan programs specifically designed for non-U.S. citizens, including green card holders ¹.
- Credit and Documentation: Green card holders will need to provide documentation to support their loan application, including proof of income, credit history and other financial information

Here are some of the benefits that you may be able to take advantage of as a first-time home buyer.
- Low- or no-down-payment mortgages
- Down payment assistance
- Closing cost assistance
- Federal tax credits
- Homeownership vouchers
- Real estate and federal lands for sale by the government
- Tax benefits
- Predictable monthly payments
- Owning an asset that can appreciate
- Secure retirement

A foreign national loan is a type of mortgage loan available for foreign nationals who want to purchase properties in the United States ¹ ² ³. Here are some key points about foreign national loans:

- Designed for non-residents in the United States who want to buy a house
- No Social Security number, green card, or visa required
- Borrowers can demonstrate creditworthiness through alternative means or submit a credit report from their country of origin
- Eligible property types vary by lender, but these loans are for non-citizens who want to purchase residential property and use it as a temporary home, vacation home, or investment property
- More stringent requirements and require more extensive documentation compared to conventional loans
- Higher interest rates and larger down payments
- Not all lenders offer foreign national loans

No, a 20% down payment is not required for a conventional home loan. While 20% is the recommended amount, some conventional loans may require as little as 3% down. However, it is important to note that putting down a smaller amount can result in higher monthly costs due to private mortgage insurance (PMI).

Yes, you can finance a home with a down payment of under 5% using a conventional loan. Here are some options ¹ ²:

- 3% down conventional loan: This is a good option for first-time homebuyers and those who haven't owned a home in the last three years. With a 3% down payment.
- 5% down conventional loan: This option is suitable for those who owned a home within the last three years. With a 5% down payment, you can qualify for an adjustable-rate mortgage (ARM). You can also qualify for a fixed-rate mortgage with a 5% down payment.

Non-QM loans are mortgages that don't meet the standards of a qualified mortgage, which is a set of guidelines established by the Consumer Financial Protection Bureau (CFPB) ¹ ². The features of non-QM loans are ¹ ²:
- Alternative income documentation
- No waiting period after bankruptcy
- Higher debt limits
- Higher down payment requirements
- Higher interest rates
- Repayment terms may be interest-only
- No government backing
Non-QM loans are suitable for individuals who are ¹ ²:
- Self-employed, retired or have a non-traditional income
- Experienced a major credit event
- Landlords who want to use the cash flow from their other properties to qualify for a home
- Have a debt-to-income ratio above 43%

Accordion ContentA 30-year fixed-conforming mortgage is a type of home loan with a fixed interest rate and a term of 30 years. The term ‘conforming’ refers to the fact that the loan meets the guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac. These guidelines include limits on the loan amount, borrower credit score, and debt-to-income ratio, among other factors.

Adjustable-rate mortgages (ARM Mortgages) have become increasingly popular in recent years, offering borrowers flexibility and potential savings on their mortgage payments. However, the complexity of ARM mortgages can be overwhelming, especially when it comes to understanding the indexes that determine the interest rate. In this article, we will delve into the commonly used indexes for ARM mortgages, explaining how they work and their impact on your mortgage payments.