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Types
of Mortgages and Loans
With
tighter restrictions and lending guidelines, many
of these loan programs are no longer available,
or more difficult to obtain. Talk with a lender
to find the right loan for you.
ADJUSTABLE
RATE Adjustable rate mortgages have an interest
rate that is adjusted at certain intervals based
on a specific index during the life of the loan.
BALLOON
PAYMENT LOAN A fixed rate loan this is amortized
over 30 years but becomes due and payable at the
end of a certain term. May be extended or may
roll-over into another type of loan.
BUY-DOWN
LOAN Buy-Down loans are fixed rate loans where
the interest rate and the payment are reduced
for a specific period of time by paying the interest
up front to subsidize the lower payment. A fixed
rate loan for first time buyers with a low down
payment, usually.
FHA
LOAN FHA loans are insured by the Federal Housing
Administration under H.U.D. They offer a low down
payment and are easier to qualify for than are
Conventional loans.
FIXED
RATE LOAN Fixed rate loans have one interest rate
that remains constant throughout
the life of the loan.
GRADUATED
PAYMENT MORTGAGE A fixed rate loan that has payments
starting lower than a standard fixed rate loan,
which then increases by a pre-determined amount
each year
for a set number of years.
MORTGAGE
CREDIT CERTIFICATE A first time homebuyer program
subject to purchase price and income limits. They
are limited to Alameda, Contra Costa, San Mateo
and Santa Clara counties. It is actually a special
tax credit and assists the buyer in qualifying
for many loan programs.
NON-QUALIFYING
LOAN Non-qualifying loans are pre-existing loans
which can be assumed by a
buyer from the seller of a property without going
through the qualifying process. The buyer pays
the seller for their equity and then starts making
the payments.
VA
LOAN VA loans are guaranteed by the Veterans Administration.
A veteran must
have served 180 days active service.
CONVENTIONAL
LOAN Conventional loans are sometimes more lenient
with the appraisal and
condition of the property. When you are buying
a “fixer upper” you may need to use
a conventional loan. Homes purchased above the
FHA loan limit of $729,000 are usually financed
with conventional loans.
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