what are various loan options while buyind a home?

Question

what are ARM's,and in what types are they available.

Answer 1

An ARM is an adjustable rate mortgage which generally carries a lower payment initially but is dependant upon the interest rates. If they go up so does your payment. The following site offers info and free quotes on the different types of mortgages so that you are able to make your own informed decision. Good Luck

Answer 2

Wow, there are so many different options, it would be hard to put them all down here. An ARM is an Adjustable Rate Mortgage. In a nutshell, you have a fixed rate for a certain timeframe (a 3 year ARM keeps the rate the same for 3 years) and then it can adjust each year up to a certain, predetermined top (or bottom) interest rate. These are usually have a lower interest rate, at least for the term of the fixed part of the loan.

Call a lender and have them prepare the information for you, they can give you all of the information you need, including comparisons as to the payments for different options. Simply put, if you're going to be in your home for more than 2 times the length of the fixed portion of an ARM, you're probably better off with a fixed rate mortgae.

Good luck!

Answer 3

ARM stands for Adjustable Rate Mortgage. An ARM is s home loan in which the interest rate is changed periodically based on a standard financial index. Most ARMs have caps on how much an interest rate may increase.

The low initial cost of adjustable-rate mortgages, or ARMs, can be very tempting to home buyers, yet they carry a degree of uncertainty. Fixed-rate mortgages offer rate and payment security, but they can be more expensive.

Here are some pros and cons of ARMs and their fixed-rate brethren.

Advantages:

• Feature lower rates and payments early on in the loan term. Because lenders can use the lower payment when qualifying borrowers, people can buy larger homes than they otherwise could buy.

• Allow borrowers to take advantage of falling rates without refinancing. Instead of having to pay a whole new set of closing costs and fees, ARM borrowers just sit back and watch the rates -- and their monthly payments -- fall.

• Help borrowers save and invest more money. Someone who has a payment that's $100 less with an ARM can save that money and earn more off it in a higher-yielding investment.

• Offer a cheap way for borrowers who don't plan on living in one place for very long to buy a house.

Disadvantages

• Rates and payments can rise significantly over the life of the loan. A 6 percent ARM can end up at 11 percent in just three years if rates rise sharply.

• The first adjustment can be a doozy because some annual caps don't apply to the initial change. Someone with an annual cap of 2 percent and a lifetime cap of 6 percent could theoretically see the rate shoot from 6 percent to 12 percent 12 months after closing if rates in the overall economy skyrocket.

• ARMs are difficult to understand. Lenders have much more flexibility when determining margins, caps, adjustment indexes and other things, so unsophisticated borrowers can easily get confused or trapped by shady mortgage companies.

• On certain ARMs, called negative amortization loans, borrowers can end up owing more money than they did at closing. That's because the payments on these loans are set so low (to make the loans even more affordable) they only cover part of the interest due. Any additional amount due gets rolled into the principal balance.

There are 3/1,10/1,7/1,5/1 ARMS (Numerical nicknames for various ARMs.) The first number stands for the number of years in the initial fixed period, while the second indicates how often the new adjusted rate will remain in effect thereafter. A 3/1 ARM, for instance, has three years of fixed payments at one rate, followed by 12-month blocks of fixed payments interspersed with annual adjustments. The total loan term would be 30 years.

Whether you go with an ARM or a fixed rate is not important. The important thing to look for is the character, skill, and ethics of the person you're working with. You can determine that by asking them and yourself certain questions:

1. Is the Broker/Lender properly licensed? You can check this on there states mortgage or real estate department. If they are they should be glad to share it with you. In most states you can actually check to see if there are any complaints against them.

2. What is there business philosophy? Do they believe in getting you the very lowest payment and filling their board with loans or do they do a few loans with great service but charge a little extra? Or do they take the middle road and just do a good job at a fair price?

3. How long have they been doing loans and how many loans have they done? Even if they are well intentioned they may be inexperienced and unable to get you what you need.

4. What are their resources? Are they a direct lender that only has one set of guidelines and better rates, are they a broker that has many programs and higher rates, or are they a combination of both?

5. What do they charge? Do they have a flat fee? Do they make there money on the "back end" ? Is it all based on your negotiation skills?

As for me, I am licensed as a Real Estate Salesperson in California. I work with a net branch that is licensed in all 50 states and I have never had a complaint from a client.

I believe in giving great customer service and charging a fair flat fee that is competitive. you could call up 50 brokers and i would probably be cheaper than two thirds of them.

I am Mortgage Banker which means I broker most of my loans and only self-fund a few. I have been in this business for five years, two of which were on the wholesale side of the business where I saw twenty times as many loans as the average loan officer.

If there is absolutely anything i can do to help you out then please give me a cal at 818-361-8585 (just ask for Kevin)

Answer 4

An ARM is the last thing you want right now. The interest rates are rising to fast to get off the sinking ship in most cases.

Answer 5

Too many to go into here. See your bank or a mortgage broker or both. Ask your Agent for input as well.
Good Luck