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What are the different types of mortgages? 1-Year
Adjustable Rate Mortgage (ARM)
A 1 year ARM has payments that adjust
once each year and the payments are calculated over a 30-year period. Typically,
this type of loan has the lowest initial start rate and can therefore help you
qualify for a larger loan amount. If you have limited funds for a downpayment
ask your mortgage specialist about AllAmerican Mortgage Lending, Inc's 1-year ARM. 3/1 ARM
This loan type has fixed payments for the first 3 years and then turns into a
1-year ARM, adjusting every year thereafter. The loan payments are calculated
over a period of 30 years. 5/1 ARM
This loan has fixed payments
for 5 years and then turns into a 1-year ARM, adjusting every year thereafter.
The loan payments are calculated over a period of 30 years. 5-Year Balloon
The loan payments on a 5-year balloon are calculated over a 30-year period, but
the loan has a life of only 5 years. At the end of 5 years, the balance of the
loan is due. Borrowers have a conversion option if some conditions are met.
7-Year Balloon
The loan payments on a 7-year balloon are calculated
over a 30-year period, but the loan has a life of only 7 years. At the end of
7 years, the balance of the loan is due. Borrowers have a conversion option if
some conditions are met. 7/1 ARM
This loan has fixed payments for
7 years and then turns into a 1-year ARM, adjusting every year thereafter. The
loan payments are calculated over a period of 30 years. 30 Year Fixed Rate
Loan
Payments on 30 year loans are calculated over a period of 30 years
and have a fixed interest rate and payment for the life of the loan. If you have
limited funds for a downpayment or if you are a Veteran, ask your All American Mortgage specialist
about All American Mortgage Lending, Inc's no down payment program if you have limited funds for closing.
15 Year Fixed Rate Loan
Payments on 15 year loans are calculated over a period of 15 years and have a
fixed interest rate and payment for the life of the loan. Payments are higher
for this loan than the 30 year fixed rate loan, but builds up equity quicker.
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