A Category For Every Colorado Mortgage Program
Each type of mortgage loan program fits into one of the following categories:
- Fixed rate (the interest rate on the home loan is fixed for the life of the loan).
- Adjustable rate mortgage (ARM). This means the interest rate is fixed for an introductory period (how long this last varies widely) - then adjusts every so often after that (every month, every 3 months, every 6 months, etc.). The mechanics of how adjustable rate mortgages work are program specific. Please talk with your mortgage consultant for specific details and eligibility requirements for the programs you are evaluating.
- Occasionally a balloon option may be available for a mortgage. This means that at the end of the balloon period, the entire amount remaining on the loan is due and payable.
- The life of the loan can vary from ten to thirty years. In some cases longer amortization schedules (the length of time that the payments are spread over are available) Buyer beware of amortization schedules that run longer than 30 years! Amortization schedules can be program specific - please talk with your mortgage consultant about the options that are available for the loan programs you are evaluating.
Keep in mind, when you shorten the amortization schedule, you increase your monthly principal and interest (P&I) payment. It also means that you own your home free and clear that much quicker.
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