| Conventional |
A mortgage loan that is not insured or guaranteed by the federal government. The maximum mortgage amount for a conventional conforming loan is $420,000. The seller can pay up to 3% in closing costs and the borrower is typically required to have a minimum of 5% for a down payment. |
| Jumbo |
A conventional mortgage with a loan amount greater than $417,000. Jumbo loans typically require a higher interest rate than loans less than $417,000 along with a larger down payment. |
| No Documentation |
A mortgage available to borrowers with excellent credit (median credit score 680 or greater). This loan also requires a down payment of 5% or greater. No documentation of income, assets or employment is required on this mortgage for borrowers who meet the credit score and down payment requirements. |
| No Ratio |
A loan for the borrower with good credit and significant assets whose ratios may exceed traditional underwriting guidelines. |
| Alt-A (Alternative Documentation) |
A loan that benefits borrowers with good credit and complex income scenerios that may not wish to gather traditional documentation. |
| Subprime |
A loan for borrowers that do not qualify for a traditional mortgage due to their credit history. |
| 100% Financing |
A mortgage loan which allows borrowers with excellent credit to finance 100% of the purchase price of the property. |
| Interest Only |
A conventional mortgage whose required monthly payment is interest only, calculated at the note rate on the outstanding principal balance. Interest only payments are allowed during the initial term of the mortgage for a period of three to ten years, with principal lump sum reductions allowed any time. Upon completion of the initial term, the principal balance is amortized (principal and interest payments) over the remaining term of the loan. |
| Construction to Permanent |
A mortgage loan which provides funds for the construction or renovation of a residential property. During the construction/renovation phase, funds are disbursed based on completion of the construction. The construction phase may be up to twelve months in duration and requires payment of interest only on the outstanding balance. Upon completion, the mortgage is modified to a fixed rate or adjustable rate mortgage amortized for 30 or 15 years. A benefit of this product is that only one closing is required, therefore eliminating the cost of duplicate closings. |
| Adjustable Rate or ARM 3/1, 5/1, 7/1, 10/1 |
A mortgage with an interest rate and payment that changes periodically over the life of the loan based on the change in a specific index. Adjustable rate mortgages may have features that allow for the interest rate and payments to be fixed for an initial period (3 years, 5 years, 7 years, 10 years) and thereafter adjusting periodically based on the specific index. |
| VA Mortgage |
A loan guaranteed by the Veterans Administration. This loan is available to qualifying veterans of the armed forces and provides for 100% financing. The maximum 100% loan is currently $417,000. |
| FHA Mortgage |
A loan insured by the Federal Housing Administration. This product typically requires a lower down payment; however, the Federal Housing Administration sets maximum mortgage limits by state and by county. |
| Closed End Second Mortgage |
This is a traditional second mortgage loan which provides you with a fixed amount of money repayable over a fixed period. This type of loan advances all funds at the time the loan is closed with no further advances. |
| Home Equity Line of Credit (HELOC) |
A HELOC is a line of credit where the interest rate adjusts (typically monthly) and secured by your home. You can pay off the outstanding balance or write a check to advance additional funds at any time during the draw period. Interest is charged on the outstanding balance. |
| Balloon Mortgage |
Balloon Mortgages have a large lump sum payment due at a specified date to pay off your loan |