Conventional and Jumbo Loans

Conventional loans are secured by government sponsored entities or GSE's such as Fannie Mae and Freddie Mac.

Fixed Rate Mortgages

A loan program where your monthly principal and interest payments never change.

Adjustable Rate Mortgages (ARMs)

These loans generally begin with an interest rate that is 2-3 percent below a comparable fixed rate mortgage, and could allow you to buy a more expensive home.

Standard ARMs and the differences

There are Various types of adjustable rate mortgages

Costs of Funds Index (COFI)

This index is used to determine the interest rate for some types of ARMs.

London InterBank Offered Rate (LIBOR)

This index is used to determine the interest rate for some types of ARMs.

Interest Rate Buydowns

The most common buy down is the 2-1 buy down. In the past, for a buyer to secure a 2-1 buy down they would pay 3 points above current market points in order to pay a below market interest rate during the first two years of the loan. At the end of the two years they would then pay the old market rate for the remaining term.