Loan Programs
What kind of loan program is best for you?
Should you get a fixed-rate or adjustable rate mortgage? A conventional loan or a government loan? Deciding which mortgage product is best for you will depend largely on your unique circumstances, and there is no one correct answer.
Fixed Rate Mortgages (FRM)
The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime.
Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting.
– Components of an ARM
Prior to choosing a home loan, you should know the advantages and risks of adjustable-rate mortgages to make an informed, prudent decision.
– Commonly Used Indexes for ARMs
This article includes a list of the most commonly used indexes by ARM lenders that affect ARM mortgage rates.
Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages combine features of both fixed-rate and adjustable rate mortgages and are also known as fixed-period ARMs.
VA Loans
VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership.
Hawaii USDA Home Loan
Most Hawaii home buyers are initially attracted to a USDA home loan for the zero-down feature of the loan program. The zero-down option is just one of the many benefits of a USDA loan.
USDA features and benefits:
- Zero Down
- Possible to close with no cash due at closing
- FICO scores as low as 620 still qualify for a low rate
- Lowest closing cost of all the government sponsored loan programs
FHA Loans
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment.
Interest Only Mortgages
Interest only mortgages are home loans in which borrowers make monthly payments solely toward the interest accruing on the loan, rather than the principle, for a specified period of time.
Balloon Mortgages
Balloon mortgages include a note rate that remains fixed initially, and the principal balance becomes due at the end of the mortgage term.
Reverse Mortgages
Reverse Mortgages allow senior homeowners to convert a portion of their home equity into cash while still living in the home.
Graduated Payment Mortgages
Graduated Payment Mortgages are loans in which mortgage payments increase annually for a predetermined period of time (e.g. five or ten years) and becomes fixed for the remaining duration of the loan.