A mortgage used to purchase a home from another individual, builder, trust, or any other entity other than the borrower. The borrower may be purchasing the property as an owner-occupied principal residence, a second home, or for investment purposes.
Refinance
A mortgage used to payoff an existing mortgage or mortgages. A refinance can also be used to satisfy a land contract or a construction loan. The most common reasons for a refinance are to lower interest rates and monthly payments, combine mortgages into one payment, debt consolidation, or to withdraw equity for other personal reasons.
Loan Programs Defined
30/25/20/15/10 Year Fixed Rate
By far the most popular mortgage is the standard fixed rate. The principal and interest payment will be fixed for the entire term of the loan. This is a good choice for those borrowers who prefer payment stability. Note that the tax and insurance payments CAN increase as the years go by which can have an impact on the monthly payment.
Adjustable Rate or "ARM"
The adjustable rate loan or "ARM" for short, has become very popular in recent years. The reason is simple. The rate is lower than on the fixed rate mortgage. At least at the beginning. There's the rub. The Adjustable can go up or down as the years go by. How often the rate adjusts will be determined by the type of ARM you get. 1 year Arm's will adjust every year, 3 year Arm's every three years etc. Fortunately today's adjustable rate loans come with "caps" which will limit the amount the rate can increase over the term of the loan. Arm's are not for everybody. Your Boardwalk Loan Officer can explain the different Arm's available and help you decide if they are right for you.
Interest Only
Interest only loans have gained in popularity in recent years. The benefit to an interest only loan is that you are only required to pay the interest due on the loan per month. This results in a much lower payment. There is a fixed amount of time that you are allowed to pay only interest. Usually anywhere from 1-3-5 years. After that, the loan reverts to a normal "principal and interest" monthly payment. The downside to these loans is that if you are only paying the interest due, then the principal amount of the loan is not being reduced. At some point the principal will have to be repaid.
100% programs are now GONE!
3% Loans are on the choping block.
All these loans are avaliable in the Chicago Home Loan market.
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