| When considering the many mortgage loan programs that are available, you may
find yourself overwhelmed. Click on a mortgage loan type to get a primer (in
layman's terms) on how a particular mortgage plan works. |
| Fixed-Rate Mortgage - |
| A mortgage loan program where the interest rate does not change for the life
of the loan. | |
| Adjustable Rate Mortgage (ARM) - |
| A mortgage loan program in which the interest rate is adjusted periodically
based on an index. Also called a variable rate
mortgage. | |
| Balloon Mortgage - |
| Behaves like a fixed-rate mortgage loan for a set number of years (usually
five or seven) and then must be paid off in full in a single "balloon" payment.
Balloon mortgage loan programs are popular with those expecting to sell or
refinance their property within a definite period of
time. | |
| Two-Step Mortgage - |
| A mortgage loan program where the interest rate is fixed for the first seven
years and then is adjusted one time for the balance of the loan
period. | |
| Conforming Loan - |
| A mortgage loan program for up to and including $417,000 in the continental
United States (Alaska and Hawaii limits are
higher). | |
| Jumbo Loan - |
| A mortgage loan program for $417,001 or more in the continental United
States (Alaska and Hawaii limits are higher). These limits are set by the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation. Because jumbo loans cannot be funded by these two agencies, they
usually carry a higher interest rate. | |
