First Mortgages

Adjustable Rate Mortgage (ARM)
A mortgage loan in which the interest rate is scheduled to increase or decrease throughout the life of the loan. The rate is tied to a particular index and, upon terms specified in the note, the rate will change with the value of that index.

30-, 15-Year Fixed Rate Mortgage
These are loans that have a fixed interest rate and fixed payment for a given period of time and are, therefore, the most stable mortgage available. They are fully amortizing and, once paid, the title is reconveyed and the property is free and clear of that note. Typically geared for long-term plans, considered to be over 5-7 years.

Buy Down Fixed Rate Mortgages
Buy down fixed rate mortgages are fixed rate mortgages, usually for 30 years, that have a lower rate for the first, second and/or possible the third year of the loan. They will not exceed the second, third or fourth rate change once it is reach. For example, a 30-year 2/1 buy down has a three-step rate change. The initial rate may be 5.25% for one year, 6.25% for year two and 7.25% for year three until the loan is paid in full. These can be lender, buyer or, in some cases, seller paid charges.

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