• A mortgage with periodic payments that do not fully amortize the loan. The outstanding balance of the mortgage is due in a lump sum at the end of the term.
• The advantage of a balloon mortgage is that the interest rate is generally lower than a fixed rate loan.
• The disadvantage is that at the end of the term you will need to come up with a lump sum to pay off the loan.
• There are options to chose a balloon loan with refinancing options, which allow you the opportunity to convert to a fixed rate loan at the end of the balloon period – pending certain conditions are met.

LIBOR Adjustable Rate Mortgages:
6-Month Libor ARM

• London Inter Bank Offering Rate (LIBOR) is an average of the interest rate on dollar-denominated deposits, also known as Eurodollars, traded between banks in London.
• The 6-month is the most common LIBOR, however there are also 1 and 3 month LIBORs as well as a 1-Year LIBOR.
• LIBOR-indexed ARMs offer borrowers aggressive initial rates (lower than many other ARMs).

VA Loans:
VA (Fixed and ARM)

• Loans guaranteed by US Department of Veterans Affairs.
• Allows veterans and service persons the ability to obtain home loans with favorable loan terms (usually without down payments).
• You must be eligible and qualify with VA prior to applying for a VA loan.
• Limits to the loan amount may apply.

Fixed Rate Mortgages:
30-Year, 20-Year, 15-Year Fixed Rate Mortgage

• A mortgage with an interest rate and monthly payments that remain constant over the life of the loan.
• The most popular are the 30 and 15 year programs.
• A 30-year fixed rate will afford you a lower monthly payment than a 15-year fixed program. However, if you can afford a higher monthly payment, your loan will be repaid twice as fast.

• Fixed rate for a certain period (10, 7, 5, 3, or 1 year), and then the interest rate changes annually to the current market rate which will now be the interest rate for that given year.
• Most ARMs will have the following:
• Interest rate cap: protects you from enormous increases in monthly payments.
• Lifetime cap: limits the interest rate increase over the loan period.
• Periodic or Adjustment cap: limits how much the interest rate can increase at one time.

Jumbo Loans:

• A loan larger than the conforming loan limit established by Fannie Mae or Freddie Mac.
• Interest rates are usually slightly higher than conforming loans.

FHA Loans:
FHA (Fixed and ARM)

• Loan programs that have lower down payment requirements.
• Usually are easier to qualify for verse a conventional loan.
• Limits to the loan amount may apply.
• Federal Housing Administration – (part of US Department of Housing and Urban Development).

Other Options:
Other options to consider with Envoy Mortgage:

• First Time Home buyer Programs
• No Cost Refinances