LOAN PROGRAMS
Some examples of different loan programs:
Fixed rate loan, typical duration is 30 years but can be shorter. The interest rate does not change throughout the loan period. As standard, will cover 80% of the purchase price, some programs may go as high as 100%.
Adjustable Rate Mortgage (ARM), typical duration is 30 years. The interest rate is tied to some index and will change from time to time. May have negative amortization (means the loan amount may increase when insufficient interest is being paid).
Private Mortgage Insurance (PMI), insurance premiums that may be required when the loan exceeds 80% of the purchase price.
FHA, VA, government backed loans which provide protection to the lender as an alternative to PMI.
Jim Forsyth. College Realty Inc. GMAC Real Estate. 14767 Bear Valley Road, Hesperia, CA, 92345