TYPES OF LOANS

Fixed Rate Loans
Fixed rate loans have a fixed interest rate over the life of the loan, e.g. 15-30 years. They are broken into two basic categories, Conforming, up to $359,650, and Jumbo, in excess of $359,650. Conforming interest rates are generally lower than Jumbo and usually require complete income, asset and credit documentation. Jumbo loans can be provided with full, limited or no documentation except credit. It should be noted that conforming loan amounts can be funded on Jumbo pricing according to the Jumbo loan’s underwriting guidelines.

Some fixed rate programs are available with an initial interest only period, usually 10 years. After the interest only period, the loan re-amortizes over the remaining term of the loan, usually 20 years.

Variable Rate Loans or ARMs
Variable rate loans provide terms where in the interest rate/payment can adjust at predetermined intervals over the life of the loan. There are always rate adjustment caps, which provide limitations that protect the borrower from excessive payment adjustments.

Traditional variable rate loans have a variety of introductory periods ranging from 1 month to 10 years. Interest only ARM programs are available. Generally speaking, the interest only period corresponds with the introductory rate period, and then is amortized over the remaining term of the loan.

Variable rate loans are generally written with a term of 30 years. There are a few loan products available, which are amortized over a 40-year term.

Option ARM, Pick-A-Payment or Neg-Am Loan
These loans are a type of variable rate loan with potential negative amortization. The interest rate fluctuates monthly. Each month 3 payment options are available.

1. The minimum payment, which is amortized over the term of the loan using the start rate (the minimum payment can adjust annually and usually limited to an increase of 7.5% of the prior minimum payment).
2. The interest only payment, which would cover all accumulated interest for the month billed. If this payment is more than the minimum payment and you choose only to make the minimum payment, the outstanding interest that you did not pay will be added to the balance of your loan, thus causing negative amortization.
3. The fully amortized payment would be a principal and interest payment. If you always made this payment, your loan would be paid off at the end of your loan term.

Balloon Loans
These loans have either interest only or amortized payments. At some pre-specified point in time the remaining principle balance is all due and payable.

Share Loans
Loans secured by stock in a Residential Stock Cooperative or an Ownership Certificate in a common interest subdivision. Both fixed and variable rate loans can be available.

Community Apartment Owners Association Loans
Better known as Own-Your-Own Apartments, are limited at this time to Variable Rate loans.

Construction Loans
Single close, or permanent construction loans are one of our specialties. These loans can be fixed or variable rate loans. There is one closing that covers the construction of the property and fully amortized permanent loan.