Fixed Rate Mortgages (FRM)
The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime.
Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting.
Hard Money Loans
Hard money loans are limited document, largely asset based loans. They are strictly business purpose loans, such as renovating a flipping a home or a multi family bridge loan.
Debt Service Coverage Ratio Loans
Debt service coverage ratio (DSCR) loans are a nonconforming loan product that can be a good solution for an investment property that the borrower does not have W2 income.
Bank Statement Loans
Bank statement loans are another non-agency product that might be a good solution for non W2 workers that can demonstrate consistent income on their bank statements.
Interest Only Mortgages
Interest only mortgages are home loans in which borrowers make monthly payments solely toward the interest accruing on the loan, rather than the principle, for a specified period of time.
Commonly Used Indexes for ARMs
This article includes a list of the most commonly used indexes by ARM lenders that affect ARM mortgage rates.
Balloon mortgages include a note rate that remains fixed initially, and the principal balance becomes due at the end of the mortgage term.
What kind of loan program is best for you?
Should you get a fixed-rate or adjustable rate mortgage? A conventional loan or a government loan? Deciding which mortgage product is best for you will depend largely on your unique circumstances, and there is no one correct answer.