Learn more about common mortgage loan and refinance terms like conventional, FHA, VA, ARM, PMI, and more.
A fixed-rate mortgage is a loan that locks the interest rate for the life of the loan.  Your principal and interest payment stays the same for as long as you have your loan.  A conventional (conforming) loan is a loan that conforms to established guidelines by Fannie Mae or Freddie Mac.  Conventional loans usually require a minimum down payment of 5%.

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An adjustable rate mortgage, or ARM, is a 30-year loan with an initial fixed-rate period, typically 3 to 10 years.  The interest rate may change (up or down) on an annual basis once the initial fixed rate period of the loan expires.  This type of loan has limits (or caps) that control the amount the interest rate can adjust up or down.  Typically, this type of loan starts out with a lower rate/payment, but can increase quickly after the initial fixed rate period ends.  In some cases, this type of loan is beneficial to borrowers, but other times it means a significant payment increase. 

Contact us to find out if an ARM is a good choice for your situation.

A jumbo (non-conforming) mortgage is a home loan with an amount that exceeds conforming loan limits imposed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy mortgages from lenders.  These thresholds are based on averages and change annually.  In most parts of the United States, the limits as of January 1, 2021 range from $548,250 to $822,375, based on area demographics.

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Private Mortgage Insurance, or better known as PMI, is an insurance premium that is paid either monthly or one time up-front to offset not having the typical down payment requirement of 20%.
 
PMI is normally required on any loan that does not have at least a 20% down payment.  PMI is an insurance policy that lets you make a lower down payment by insuring the lender against loss if you fail to pay your mortgage.
 
Contact us to learn more about how PMI could effect your mortgage payment.

An FHA mortgage loan is a loan offered by the government and HUD (the Dept. of Housing and Urban Development).  FHA is a program that was originally designed to assist first time home buyers by offering a lower down payment (3.5%) than that required by a conventional loan.  You do not have to be a first time home buyer to qualify for the program.

Contact us today to find out if you qualify for an FHA mortgage loan.

VA loans are government home mortgages offered through the Department of Veterans' Affairs (VA).  With a VA loan, eligible service members and veterans can buy a home with little or no down payment.  They can also refinance their existing non-VA loan into a new VA loan or refinance their existing VA loan into another VA loan as long as they have the eligibility.

Contact us today to learn more about VA loans.