THE SUNDIN GROUP | Types of Home Loans

Types of Loans

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What Type Of Home Loan Meets Your Needs?

As REALTORS® we are often asked "what type of loan do you recommend for me," and this is simply a question that only you and your lender/broker can answer. Every person's financial situation is different and what is a good loan program for one person, may not be for the next person. Tammy Armour, of Peoples Mortgage was kind enough to write a brief description for us of the most commonly known (and asked about) loan types. If you would like Tammy to contact you to discuss the various loan programs available, simply click HERE to send her an email. You can also refer to our Real Estate Glossary page which provides explanations of many mortgage terms & loan types.

Fixed Rate Mortgage
Fixed for the term of the loan-15, 20, 25, 30 year term, the monthly mortgage payment will remain the same for the term of the loan.

Adjustable Rate Mortgage
Also known as an ARM, this is a fixed rate for a period of the loan and will fluctuate to the current interest rate when the ARM matures. The interest rate is calculated from a current index or Treasury bills.

Typically ARM loans are a lower rate for the fixed portion of the note. For the homebuyer who is planning on moving in a few years, this can be a a good loan option to consider.

80/10/10 What Does This Mean?
Sometimes it can be tough for a homebuyer to come up with 20% down. In a conventional loan, where the loan to value is higher than 80%, the home buyer is required to pay mortgage insurance. The 80/10/10 loan is an alternative to paying mortgage insurance and can quite often have a lower mortgage payment than you would have if you were paying mortgage insurance.

80/10/10 - The Breakdown

80% is the 1st Loan amount and is at market rate

10% is the 2nd Loan amount and is slightly above market rate

10% is the down payment on the home.

There are many other ways to structure this type of loan depending on what your needs are. A lender/mortgage broker will be able to answer any questions you may have regarding which loan program will be best for you.