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Mortgage Type

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Mortgage Type refers to the kinds of mortgage products offered by a mortgage broker like Stem Lending.

Here are the common types of mortgages:

  • Fixed-Rate Mortgage. Mortgages designed to be paid off in 8 to 30 years at a fixed interest rate. Can have long term (20-30-years), medium term (15-19 years or short term (8-14 years).
  • Rate/Term Refinance. Taking out a new mortgage to pay off and replace an existing mortgage. Obtaining more desirable loan terms than current mortgage offers, such as lower interest rate, lower monthly payments, shorter or longer payoff terms, replace adjustable-rate loan with fixed-rate loan, etc.
  • Cash-out Refinance. A single transaction to both refinance your current mortgage and borrow against your available home equity. Borrowing money for any purpose desired by the homeowner, in addition to any of the other potential uses of refinancing. Fixed-rate or ARM.
  • Adjustable Rate Mortgage. Mortgage with interest rate that varies over time, based on market conditions.
  • FHA Loans. Government program designed to facilitate home ownership, including borrowers with low credit.
  • Interest-only Mortgage. Interest payments only for a fixed period of time before principle must be paid off.
  • Piggyback Loan. A second mortgage, or lien, used to cover part of the purchase price of a home. Partial or entire down payment in order to avoid paying for mortgage insurance; funding jumbo portion of high-end home purchase so that the rest can be covered with a lower-rate conforming loan.
  • Home Equity Loan. Loan secured by the equity in the borrower's home; that is, the home serves as collateral for the loan. A type of second mortgage, or lien. Borrowing money for any purpose desired by the homeowner, often home improvements or other major expenses.
  • HELOC. A type of home equity loan in which you have a pre-set limit you can borrow against as needed. Usually divided into a draw period, during which you can borrow money, followed by a repayment period. Borrowing money at irregular intervals for any purpose desired. Draw period is usually an interest-only ARM; repayment usually a fixed-rate loan.
  • Reverse Mortgage. A category of home equity loans for persons age 62 and above. Monthly stipends to supplement retirement income; monthly cash advances for a limited time; HELOC to draw as needed.
  • USDA Loan. Program to assist low- to moderate-income persons purchase a modest home in rural areas and small communities.
  • VA Loan. Home loan program for members and veterans of the armed forces and certain others.

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