Mortgage Types
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Fixed Rate Mortgage - Interest rate remains constant over term of loan.
Features:
The interest rate on a fixed rate mortgage remains constant over the term of the loan. Your monthly principal and interest payment will never change through the term of the loan.
Benefits:
Fixed rate mortgages are especially suited for those who expect to remain in their homes for a number of years. You can provide a down payment as low as 3% of the purchase price.
Advantages:
Your mortgage payment is not affected if interest rates go up in the general market. Your monthly payments are set, so you can easily budget your finances.
Adjustable Rate Mortgage - An interest rate that fluctuates over time.
Features:
An interest rate that fluctuates over time.
Benefits:
Generally, the initial interest rate is lower than that of a fixed rate mortgage. The lender bases its calculations on the index and margin of the mortgage. The index is a base rate that the lender then adds the margin at each adjustment period to determine a new interest rate. Be sure to check the type of index your mortgage lender is using, because some fluctuate more than others.
Advantages:
The interest rate you pay will generally drop if prevailing interest rates go down. Low start rates can reduce your initial payments.
Balloon Mortgage - Principal and interest payments remain constant.
Features:
Principal and interest payments remain constant for the term of a balloon mortgage, which is usually five to seven years, although principal and interest are amortized over 30 years.
Benefits:
At the end of the five to seven years, you must pay off the mortgage; this can be done by refinancing.
Advantages:
Balloon mortgages are typically offered at lower interest rates than other fixed products, making them more affordable. If you know you'll be in your home for less than the term of the mortgage, this may be a product you should consider.
Conventional Mortgage - Not obtained under a government program.
Conventional mortgages are mortgages that are not obtained under a government insured or guaranteed program such as the Federal Housing Authority (FHA) or Veterans Administration (VA). Some of these loans may also be defined as conventional conforming loans, which means they are eligible for purchase by one of the two government chartered corporations created to support the secondary mortgage market. These corporations are the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) and the Federal National Mortgage Association (FNMA or Fannie Mae).
Equity Mortgage - Market value of property minus outstanding obligations.
Equity mortgages represent the value an owner has in the property over and above the obligations against the property.
FHA Mortgage - A Federal Housing Administration (FHA) insured loan.
A Federal Housing Authority (FHA) insured loan allows you to buy a home with a low down payment, ranging from 3% to 5% depending on the price of the home. This may provide you with more buying power.
Pulte Mortgage LLC is not authorized to lend in all states. Please check with your loan officer for more information with regards to this issue.
VA Mortgage - A loan guaranteed by the Veterans Administration (VA).
If you are currently in the United States military, or if you have ever served in U.S. armed forces, you may be eligible to get a loan guaranteed by the Veterans Administration (VA). If you qualify, this special government benefit to veterans might be a good option for you as it allows you to purchase a home with a low down payment.
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