Mortgage Loan Products

Mortgage Loan Products

In today’s mortgage industry, there are many different loan products to choose from.  Knowing what products there are and choosing the right one for your particular circumstances within the current economic environment can be intimidating.  This is when it is vital to be working with a seasoned loan officer.  These products can include, fixed rate, adjustable rate mortgage (ARM), Interest only, Balloon, Home Equity Line of Credit (HELOC), Construction, Home Equity Conversion Mortgage (HECM), Bridge Loan and the list can go on.  Over the next few weeks I will discuss the details behind these loan products.

Fixed Rate:

loan products property guidingA fixed rate loan is most common at 30, 20, or 15 year straight fixed terms.  The principal and interest sum is the same every month and each month a little more principal and a little less interest is paid.  The difference adds up to the same total each month.  If choosing to escrow, the housing payment (principal + interest +taxes + insurance) could change due to changes in tax assessments and/or insurances.  Insurance includes not only your common hazard insurance, but also could include flood and mortgage insurance as well.

Buy Down:

With a buy down, the payment rate is temporarily reduced for a period of time.  The most common is a 2/1 buy down.  Under a 2/1 buy down, the payment rate is based off a rate that is 2% lower than the note rate in the first year, and 1% lower than the note rate in the second year.  After that, the payment rate equals the note rate for the remaining term, years 3 through 30.  For example, let’s say the note rate is 6.5%.  The first year the payment rate would be 4.5%, the second year the payment rate would be 5.5%, and all remaining years thereafter would equal the not rate of 6.5%.

Not sure who to call or where to start? Contact me today for a 100% free no-obligation loan inquiry analysis.

Matt Pell,  Loan Officer
Mortgage Warehouse, LLC
(239) 672-8502 – Direct Line
(239) 344-9223 – Fax
Company NMLS ID – 137154
Individual NMLS ID – 1018529
Better Business Bureau Rating = A+

Posted on August 19, 2013, in Finance and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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