Hybrid ARM mortgages, also called fixed-period ARMs, combine features of both fixed-rate and adjustable-rate mortgages. A hybrid loan starts out with an interest rate that is fixed for a period of years (usually 3, 5, 7, or 10). Then, the loan converts to an ARM for a set number of years. An example would be […]
An FHA (Federal Housing Administration) loan is a type of government-backed mortgage insured by the FHA. Designed to help low-to-moderate income borrowers obtain financing, FHA loans offer more lenient credit requirements and lower down payment requirements, making them an attractive option for first-time homebuyers. One of the primary benefits of an FHA loan is the […]
A VA home loan is a mortgage loan guaranteed by the Department of Veterans Affairs (VA) for eligible veterans, active-duty military personnel, and surviving spouses. The VA loan program was created to help military members achieve homeownership with more favorable terms and lower costs. One of the key benefits of VA loans is the ability […]
A mortgage is called “Interest Only” when its monthly payment does not include the repayment of the principal for a certain period of time. Interest Only MORTGAGES are offered on fixed-rate or adjustable-rate mortgages as well as on option ARMs. At the end of the interest-only period, the loan becomes fully amortized, thus resulting in […]
To understand an ARM, (ADJUSTABLE RATE mortgage) you must have a working knowledge of its components. Those components are: Index: A financial indicator that rises and falls, based primarily on economic fluctuations. It is usually an indicator and is therefore the basis of all future interest adjustments on the loan. Mortgage lenders currently use a variety […]
6-Month CD Rate This index is used in ARM mortgages and is the weekly average of secondary market interest rates on 6-month negotiable Certificates of Deposit. The interest rate on 6-month CD-indexed ARM loans is usually adjusted every 6 months. Index changes on a weekly basis and can be volatile. 1-year T-Bill This index is […]