Fixed-Rate Mortgage
(FRM)
A mortgage with an interest rate that remains constant for the entire term of the loan, usually 15, 20, or 30 years.
ADJUSTABLE-RATE MORTGAGE
(ARM)
A mortgage with an interest rate that can change periodically based on changes in a specified index. Initial rates are usually lower than fixed-rate mortgages but can increase over time.
FHA LOAN
Insured by the Federal Housing Administration, these loans are designed for low-to-moderate-income borrowers and often require lower down payments and credit scores than conventional loans.
VA LOAN
Guaranteed by the Department of Veterans Affairs, these loans are available to veterans, active-duty service members, and eligible surviving spouses. They typically offer favorable terms and may require no down payment.
USDA LOAN
Backed by the U.S. Department of Agriculture, these loans are designed to encourage homeownership in rural and suburban areas. They often offer low or no down payment options.
JUMBO LOAN
A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. These loans typically have stricter credit requirements and higher interest rates.
Interest-Only Mortgage
A mortgage where the borrower pays only the interest for a certain period, usually the first few years of the loan term. After that, payments typically increase to include principal as well.
Bank Statement
A bank statement loan is a type of mortgage where the borrower qualifies based on their bank statements rather than traditional income verification methods like W-2s or tax returns. This is often used by self-employed individuals or those with irregular income to demonstrate their ability to repay the loan.
Asset Depletion
An asset depletion mortgage is a type of home loan where the borrower qualifies based on their liquid assets rather than their income. The lender calculates the borrower’s ability to repay the loan by depleting (dividing) their liquid assets over a certain period, typically the loan term. This is beneficial for individuals with significant assets but low or irregular income, such as retirees or self-employed individuals.
Home Equity Loan
A loan that allows homeowners to borrow against the equity in their homes, using the home as collateral. Interest rates are typically fixed.
Home Equity Line of Credit
(HELOC)
Similar to a home equity loan, but instead of receiving a lump sum, borrowers can access funds as needed up to a certain credit limit. Interest rates are often variable.
Construction Loan
A short-term loan used to finance the construction of a new home or significant renovations. Once construction is completed, it is usually refinanced into a traditional mortgage.
Reverse Mortgage
A reverse mortgage is a financial product designed for homeowners aged 62 and older, allowing them to convert part of their home equity into cash without selling their home. Instead of making monthly payments to the lender, the lender makes payments to the homeowner, either in a lump sum, monthly payments, or as a line of credit. The loan is typically repaid when the homeowner moves out of the home or passes away.
Non Owner:
A non-owner loan program enables borrowers to obtain financing for properties they do not intend to occupy themselves, such as rental or investment properties. These loans typically have different terms and eligibility criteria compared to owner-occupied mortgages, reflecting the investment-focused nature of the arrangement.
These are just some of the mortgage products available, each catering to different financial situations and borrower needs.
