Types of Mortgage Loans Available to Borrowers

Purchasing a house is one of the most important and the biggest financial decisions for many of us. It is a big commitment and requires a lot of planning, shopping and comparing mortgage rates and above all educating ourselves about the various types of mortgage loans available out there. There are a number of different types of home mortgage loans available to borrowers in the market today to meet their unique needs and situations.

There are several different types of mortgages of which the most commonly used ones are:

• Fixed-Rate Mortgages
• FHA Mortgages
• Adjustable-Rate Mortgages
• Jumbo Mortgages

Fixed Rate Mortgages
As the name applies, fixed rate mortgages are mortgage loans with rates fixed for the life of the loan. Fixed rate mortgages are like worry free mortgages for borrowers as borrowers know beforehand what their monthly mortgage payments will be throughout the life of the loan. Any changes in the mortgage market such as increase in mortgage rates will not affect borrowers with their mortgage rates. There are several kinds of fixed rate mortgages depending on the length of the mortgage term such as 30 year fixed rate mortgages, 20 year fixed rate mortgage and 15 year fixed rate mortgages.

Currently at Total Mortgage, a 30 year fixed rate mortgage is available at a 4.000 percent rate and 4.201 percent APR, and the 15 year fixed rate mortgage is available at a 3.250 percent interest rate and 3.601 percent APR.

FHA Mortgages
FHA mortgages are home loans insured by the Federal Housing Administration and designed to help those borrowers who would otherwise not be able to get mortgages through conventional programs. FHA mortgages have gained popularity among first time homebuyers in recent years because of their flexible mortgage requirements, consistent rates throughout the loan term and lower down payments usually 3.5 percent of the total loan amount. FHA mortgages are only available through FHA approved lenders and Total Mortgage is one of them.

Today at Total Mortgage the 30 year fixed FHA mortgage is offered to qualified borrowers at a 4.125 percent interest rate with 5.537 percent APR.

Adjustable Rate Mortgages (ARM)
Adjustable rate mortgages are mortgages with initial low rates for a specified time and then fluctuate periodically after that based on the market conditions. The initial rates are significantly lower than fixed rate mortgages, however borrowers have to be aware that their mortgage payments may increase after the rates begins to adjust. ARMs are usually considered riskier than fixed rate mortgages and are considered ideal for borrowers who plan to stay in their houses only for a short time or who think their income would increase in future to be able to cover the increased payments.

The 5/1 ARM (adjustable rate mortgage) conforming mortgage is available today at Total Mortgage at a rate of 2.500 percent and 3.022 percent APR.

Jumbo Mortgages
Jumbo mortgages are mortgages with larger loan amounts which exceed the conforming loan limits set by Fannie Mae and Freddie Mac. The conforming loan limits are different across the country. For most parts of the country the conforming loan limit is set to $417,000 while areas which fall under high cost areas have conforming loan limits up to $729,750. Any loans above these conforming limits are considered jumbo loans. Jumbo loans are higher risk to lenders and usually have higher mortgage rates and stricter mortgage criteria, including higher down payments and higher credit requirements.

At Total Mortgage, a 30 year fixed jumbo mortgage is available at a 4.875 percent rate and 5.081 percent APR, and a 15 year fixed jumbo mortgage is available at a 3.500 percent interest rate and 3.844 percent APR.

For more information on our current mortgage rates and mortgage products please call 877-868-2503 to speak with one of our mortgage experts today!

Mortgage rates are always changing. All rates were quoted at 11:30 A.M., on December 3, 2010.

*All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 2 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice.