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These are general descriptions of the types of home mortgage loans. Your Amerihome Lending mortgage planner can help you choose the loan that best fits your financial situation. Call us today at 240-207-2800 for information on current rates and the types of loans suitable for your needs.
Fixed rate loans lock in a specific interest rate for a defined period of time. Varying time frames for repayment are available with a wide range of terms. Among the most familiar time frames are 30-year-fixed and 15-year-fixed loans, but other time frames often are available. Usually the monthly payment will be higher for shorter terms, but, of course, the loan is retired sooner.
Adjustable rate mortgages are available in varying time frames. Instead of a fixed rate for the length of the loan, adjustable rates do just that; they change in time increments, determined by you and Amerihome Lending. One-year, three/one, five/one, seven/one, and ten/one ARM loans are available to help meet your needs. A one-year ARM may change every year based on an index (such as the weekly average yield on U.S. Treasury Securities) plus a margin. A three/one ARM fixes a rate for the first three years and then may adjust yearly after that. Five/one, seven/one and ten/one ARMs simply fix the rate for a longer period of time before adjusting annually. Depending on how long you plan to stay in your home, an ARM can help you obtain the lowest rate possible for the longest period of time. This variety of adjustable rates allows you and your Amerihome Lending loan officer to fit your mortgage to your individual needs.
As a rule, interest rates on ARMs are usually lower at the outset than fixed rate loans, and thus can be easier to qualify for. Generally, there are caps placed on how much a rate can go up or down incrementally, as well as a lifetime-of-the-loan cap.
FHA – An FHA loan is insured by the Federal Housing Administration, and is available to anyone purchasing or refinancing their home. The down payment requirement is low and certain closing costs can be financed. Both fixed and adjustable rates are available.
VA – A VA loan is guaranteed by the Department of Veterans Affairs and is available to eligible veterans and certain unmarried surviving spouses of veterans. No down payment is required and the loan is assumable with certain restrictions.
This type of loan is for the construction of a new home, and provides funds for building the home as well as for permanent financing once it is completed. Upon completion, the loan is converted to a permanent mortgage.
“Jumbo” refers to a mortgage loan in an amount above conventional conforming loan limits. This standard is set by Fannie Mae and Freddie Mac, establishing the limit on the maximum value of any individual mortgage they will purchase from a lender. The average interest rates on jumbo mortgages typically are higher than for conforming mortgages.
The Home Equity Conversion Mortgage (HECM), commonly referred to as a reverse mortgage, is a program of the Federal Housing Administration. It is a special type of home loan for homeowners 62 years of age or older. The loan allows the homeowner to convert the home equity they’ve built up over the years into cash. Many special requirements and considerations apply to this type of loan.
The Home Affordable Refinance Program (HARP) is a federally funded initiative designed to help homeowners who owe more on their mortgage than their home is worth to refinance their mortgage into a fixed-rate loan with a lower monthly payment. Homeowners must meet a number of specific requirements to qualify and participate.
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Rockville, MD 20850
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