In order to help you with your next home purchase, I have put together a simple review of some of the major mortgage programs:
Variable or Adjustable-Rate Real Estate Mortgages
With an adjustable rate mortgage, the rate of the loan can change throughout the term of the loan. Many ARMs have a short fixed period and then become truly adjustable. The rate of the loan is based on adding points to a fixed base.
Fixed-Rate Real Estate Mortgages
In this type of loan the interest rate stays the same throughout the term of the loan.
Balloon Real Estate Loan
A balloon loan is a real estate loan where there is a lump sum due at the end of the loan. This normally encourages an individual to refinance prior to the end of the term of the loan.
Jumbo Real Estate Loan
A Jumbo Loan is any residential or commercial loan exceeding the guidelines of Fannie Mae and Freddie Mac.
FHA Real Estate Loan
An FHA loan is a loan in the United States that is insured by the Federal Housing Administration.
VA Real Estate Loan
A VA Loan is a loan in the United States guaranteed by the Veterans Administration. The loan may be issued by qualified lenders. The VA was designed to offer long-term financing to American Veterans or to their surviving family members.
A Hybrid loan combines a fixed period along with an adjustable component. Usually these loans are fixed for a period of time and then the loan becomes adjustable where it is dependent on current rates.