Loan Programs
Which Mortgage is Right for You?
Explore the various home loan options available to you and discover the perfect fit for your needs. Our expert team is here to guide you through the process, ensuring you make the best choice for your financial future. Let us help you find the ideal home loan today.
Mortgage Rate Options
Fixed Rate Mortgages
A traditional fixed-rate mortgage is the most popular loan option for homebuyers, offering stability and predictability throughout the life of the loan. With this type of mortgage, your monthly principal and interest payments remain the same, regardless of market fluctuations. Available in terms ranging from 10 to 30 years, fixed-rate mortgages can typically be paid off early without any penalties, making them a flexible choice for long-term financial planning.
Even with a fixed-rate mortgage, your total monthly payment might fluctuate if you have an “impound account.”
In this setup, lenders collect additional funds each month to cover property taxes and homeowners insurance. These funds are then used to pay these expenses when they come due. If your property taxes or insurance premiums change, your monthly payment will adjust accordingly. Despite this, fixed-rate mortgages remain a highly stable and reliable option for homebuyers seeking consistent payments over time.
In addition to the monthly “principal + interest” and any mortgage insurance premium (the amount charged to homebuyers who put less than 20% cash down when purchasing their home), some lenders collect additional money each month for the prorated monthly cost of property taxes and homeowners insurance. The extra money is put in an impound account by the lender who uses it to pay the borrower’s property taxes and homeowners insurance premiums when they are due. If either the property tax or the insurance happens to change, the borrower’s monthly payment will be adjusted accordingly. However, the overall payments in a fixed-rate mortgage are very stable and predictable.

To protect borrowers, ARMs include “caps” that limit how much the interest rate can increase at each adjustment and over the life of the loan. For example, with a “3/1 ARM” featuring an initial cap of 2%, a lifetime cap of 6%, and an initial rate of 6.25%, the highest rate in the fourth year would be 8.25%, and the maximum rate over the loan’s term would be 12.25%.
ARMs can be a strategic choice for buyers who plan to sell or refinance before the adjustment period begins, offering lower initial payments and the potential to afford a more desirable property.
All ARM loans have a “margin” plus an “index.” Margins on loans typically range from 1.75% to 3.5% depending on the index and the amount financed in relation to the property value. The index is the financial instrument that the ARM loan is tied to such as: 1-Year Treasury Security, LIBOR (London Interbank Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI).
Mortgage Rate Options
Adjustable Rate Mortgages (ARM)
Adjustable Rate Mortgages (ARMs) offer a flexible loan option where the interest rate can change over time based on market conditions. These loans start with a lower fixed interest rate for an initial period, making it easier to qualify for a more expensive home. After this period, the rate adjusts periodically, typically every year, based on a predetermined index like the 1-Year Treasury Security, LIBOR, or Prime Rate.
ARMs are usually structured over a 30-year term, with the initial fixed-rate period ranging from 1 month to 10 years. The interest rate on an ARM is determined by adding a “margin” to the chosen index, with margins typically falling between 1.75% and 3.5%. When the adjustment period arrives, the new interest rate is calculated by adding the margin to the current index rate and rounding to the nearest 1/8 of a percent.
When the time comes for the ARM to adjust, the margin will be added to the index and typically rounded to the nearest 1/8 of one percent to arrive at the new interest rate. That rate will then be fixed for the next adjustment period. This adjustment can occur every year, but there are factors limiting how much the rates can adjust. These factors are called “caps”. Suppose you had a “3/1 ARM” with an initial cap of 2%, a lifetime cap of 6%, and an initial interest rate of 6.25%. The highest rate you could have in the fourth year would be 8.25%, and the highest rate you could have during the life of the loan would be 12.25%.
Mortgage Rate Options
Interest Only Mortgages
An “Interest Only” mortgage offers a unique payment structure where, for a set period, your monthly payments cover only the interest, without reducing the principal. This option is available on both fixed-rate and adjustable-rate mortgages, including option ARMs. Once the interest-only period ends, the loan converts to a fully amortized structure, leading to significantly higher monthly payments. The longer the interest-only term, the steeper the increase in your payments when the period concludes.
During the interest-only phase, you won’t build equity, but this strategy can enable you to secure the home you desire now, rather than settling for one within your current budget. Since you’re qualified based on the lower interest-only payments—and likely to refinance before the term ends—this approach can feel like leasing your dream home while reaping the benefits of homeownership, such as tax advantages and property appreciation.
For example, if you borrow $250,000 at a 6% interest rate on a 30-year fixed-rate mortgage, your monthly payment would be $1,499. However, with a 5-year interest-only payment plan at the same rate, your initial monthly payment drops to $1,250—saving you $249 per month or $2,987 annually. When the interest-only period ends in year six, your payment will increase to $1,611, or $361 more per month. Ideally, by this time, your income has grown, or you’ve refinanced to accommodate the higher payments.
While interest-only mortgages can save you money in the short term, they typically cost more over the life of the loan. However, since most borrowers pay off their mortgages before the full 30-year term, this option can be advantageous—especially for those with fluctuating incomes. If your mortgage allows for additional payments, you can pay only the interest during lean periods and use bonuses or income increases to reduce the principal when you’re able.
Borrowers with sporadic incomes can benefit from interest-only mortgages. This is particularly the case if the mortgage is one that permits the borrower to pay more than interest only. In this case, the borrower can pay interest only during lean times and use bonuses or income spurts to pay down the principal.

Mortgage Rate Options
Graduated Payment Mortgages
A graduated payment mortgage is a loan where the payment increases each year for a predetermined amount of time (such as 5 or 10 years), then becomes fixed for the remaining duration of the loan.
When interest rates are high, borrowers can use a graduated payment mortgage to increase their chances of qualifying for the loan because the initial payment is less. The downside of opting for a smaller initial payment is that the interest owed increases and the payment shortfall from the initial years of the loan is then added on to the loan, potentially leading to a situation called “negative amortization.” Negative amortization occurs when the loan payment for any period is less than the interest charged over that period, resulting in an increase in the outstanding balance of the loan
Bank Statement and Stated Income Loan Products For Business Owners
Our Business Owner Mortgage products are available for self-employed borrowers to purchase or refinance their homes. Our programs allow our in-house team to utilize personal or business bank statements to calculate your income without the requirement of tax returns.
Available For Purchase Or Refinance > Primary, Second Home, or Investment Properties > Options For “1099” Independent Contractors
Loan Program Options
FHA Loans
FHA home loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily homes. These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn’t issue loans or set interest rates, it just guarantees against default.
FHA loans allow individuals who may not qualify for a conventional mortgage to obtain a loan, especially first-time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible income requirements.

Loan Program Options
VA Home Loans
The VA Loan provides veterans with a federally guaranteed home loan which requires no down payment. This program was designed to provide housing and assistance for veterans and their families.
The Veterans Administration provides insurance to lenders in the case that you default on a loan. Because the mortgage is guaranteed, lenders will offer a lower interest rate and terms than a conventional home loan. VA home loans are available in all 50 states. A VA loan may also have reduced closing costs and no prepayment penalties.
Additionally there are services that may be offered to veterans in danger of defaulting on their loans. VA home loans are available to military personal that have either served 181 days during peacetime, 90 days during war, or a spouse of serviceman either killed or missing in action.
Loan Program Options
USDA Loans
USDA loans are low-interest mortgages with zero down payments designed for low-income Americans who don’t have good enough credit to qualify for traditional mortgages. You must use a USDA loan to buy a home in a designated area that covers several rural and suburban locations.

Loan Program Options
Jumbo Loans
A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $548,250 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.
Also called non-conforming conventional mortgages, jumbo loans are considered riskier for lenders because these loans can’t be guaranteed by Fannie and Freddie, meaning the lender is not protected from losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or an adjustable rate, and they come with a variety of terms.