Loan
30 Year Fixed
This mortgage is fixed for the entire 30 year term of the loan. This is the most conservative mortgage available providing absolute rate stability but most likely a substantially higher rate than ARM’s or hybrids such as the five year or three year mortgages. This loan does not have a prepayment penalty and does not have negative amortization.
10 Year ARM
This mortgage is fixed at the initial rate for ten years. After the 120th month the loan will adjust each adjustment period to the lower of: 1) the current index plus the margin, 2) the previous rate plus the periodic cap, or 3) the life time cap. Depending on the recommended product for the day, this mortgage may have a first time adjustment higher than the periodic cap. This is a fully amortizing loan with a term of 30 years. The loan does not have a prepayment penalty and does not have negative amortization.
5 Year ARM
This mortgage is fixed at the initial rate for five years. After the 60th month the loan will adjust each adjustment period to the lower of:
- The current index plus the margin,
- The previous rate plus the periodic cap, or
- The life time cap. Depending on the recommended product for the day, this mortgage may have a first time adjustment higher than the periodic cap. This is a fully amortizing loan with a term of 30 years. The loan usually does not have a prepayment penalty and usually does not have negative amortization.
1 Year ARM (Includes 1 Year T-Bill, 1 Year T-Average and 1 Year T-Spot)
This mortgage is set at the start rate for one year. Thereafter, it will adjust each 12 months over a 30 year term to the lower of:
- The current index plus the margin,
- The previous rate plus the periodic cap, or
- The life time cap. Depending on the recommended product for the day, this mortgage may have a first time adjustment higher than the periodic cap. This is a fully amortizing loan with a term of 30 years. The loan usually does not have a prepayment penalty and usually does not have negative amortization.
15 Year Fixed
This mortgage is fixed for the entire 15 year term of the loan. This is the most conservative mortgage available providing absolute rate stability but most likely a substantially higher rate than ARM’s or hybrids such as the five year or three year mortgages. This loan provides a substantially higher payment than the 30 year fixed but pays off in half the time. Significantly less interest will be paid over time. However, securing a 30 year fixed and investing the payment difference elsewhere (e.g. Stock or Ira) might be a wiser investment decision (see your financial adviser). This loan does not have a prepayment penalty and does not have negative amortization.
7 Year ARM
This mortgage is fixed at the initial rate for seven years. After the 84th month the loan will adjust each adjustment period to the lower of: 1) the current index plus the margin, 2) the previous rate plus the periodic cap, or 3) the life time cap. Depending on the recommended product for the day, this mortgage may have a first time adjustment higher than the periodic cap. This is a fully amortizing loan with a term of 30 years. The loan does not have a prepayment penalty and does not have negative amortization.
3 Year ARM Hybrid
This mortgage is fixed at the initial rate for three years. After the 36th month the loan will adjust each adjustment period to the lower of:
- The current index plus the margin,
- The previous rate plus the periodic cap, or
- The life time cap. Depending on the recommended product for the day, this mortgage may have a first time adjustment higher than the periodic cap. This is a fully amortizing loan with a term of 30 years. The loan usually does not have a prepayment penalty and usually does not have negative amortization.