This section features mortgage program information for home buyers interested in real estate in the greater Phoenix area of Maricopa County, Arizona. In order to help you with your next home purchase, I have put together a simple review of some of the major mortgage programs.
Adjustable-Rate or Variable Mortgage With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. Many ARMs have a short fixed period and then become truly adjustable. The rate of the loan is based on adding points to a fixed base. The amount and times are agreed to at the inceptions of the loan.
Balloon Payment Loan A balloon loan is a real estate loan that is typically amortized over 30 years, but where a lump sum is due at the end of the loan. It may be extended or rolled over to a different loan, which normally encourages an individual to refinance prior to the end of the term of the loan.
Buydown Loan This is a loan that has a reduced rate and payment for a specific period of time. This is done by paying the interest up front.
Community Homebuyer's Program A first-time buyer program with a fixed rate and low down payment, commonly 3-5%. There are no cash-reserve requirements, and qualifying ratios are easier. The loan is subject to the buyer meeting all income standards and completing a four-hour training course.
Conventional Loan A mortgage not obtained under a government insurance program, secured by investors.
FHA Loan An FHA loan is a loan in the United States that is insured by the Federal Housing Administration under H.U.D..
Fixed-Rate Mortgage With this type of loan, the interest rate remains consistent throughout the term of the loan.
Graduated Payment Mortgage A loan that starts payments lower than standard fixed-rate loans, and increases the payments by a pre-determined amount each year.
Jumbo Loan A jumbo loan is any residential or commercial loan exceeding the guidelines of Fannie Mae and Freddie Mac.
Non-qualifying Loan A loan that may be taken over from the seller by the buyer. The buyer would pay the seller for his/her equity and assume the payments, avoiding qualification. These loans are complicated and rare. Please contact your lender with any questions.
VA Loan A VA loan is a loan in the United States, guaranteed by the Veterans Administration. The loan may be issued by qualified lenders. Customarily, the buyer pays no closing costs of the purchase, and the extra fees that the seller has to pay are usually added on to the sales price. The VA loan was designed to offer long-term financing to American Veterans or to their surviving spouses.
