A fixed rate mortgage provides for only one interest rate for the entire term of the loan.  Because the interest rate and term are fixed the payment will remain the same for the term of the loan.  Usually fixed rate mortgages are at a slightly higher interest rate than what is offered on an adjustable rate program, but a fixed rate mortgage is a good option for someone who plans on owning their home for a long time or if there is an upward trend for mortgage rates. 

An adjustable rate mortgage (ARM) permits the lender to adjust the interest rate periodically on the basis of movement in a specified index.  ARMs have a fixed term of 6 months, 1, 3 , 5 , 7 or 10 years.  Once the fixed period ends then the mortgage will adjust every 6 or 12 months depending on the ARM product.  There are adjustment caps in place to protect borrowers from payment shock if the margin has spiked at the time of adjustment.  In our recent climate of rates we have seen ARMs adjust downward, but the risk of an ARM loan is that it can go either way.  An adjustable rate mortgage is a good option for someone who wants a lower introductory rate and is planning on paying off the mortgage or refinancing before the fixed term ends.  

A balloon mortgage means that the remaining balance of a mortgage must be paid in a lump sum at the end of the mortgage term. The amount may represent slightly more than a monthly payment or may be substantial.  A typical balloon mortgage has a term of 7 years, but an amortization term of 30 years.  What this means to you is when the end of the 7 years is reached you would have to pay the remaining 23 years of principal left on the mortgage loan.  Just like ARMs, balloon mortgages can have a fixed rate for the term that is substantially lower than a 30 year fixed mortgage, but the loan is set up so that at the end of the term the loan balance needs to be paid in full.  A balloon mortgage is ideal for someone who plans on paying off the balance of the mortgage at the end of the term or someone who plans on refinancing the remaining balance into a new mortgage.

An interest only mortgage offers borrowers lower initial monthly payments than those available with traditional loan products because only interest is paid on the loan.  The interest only option gives you several benefits.  You get the advantage of a lower introductory rate, while protecting you from an unwanted balloon payment by fully amortizing after the interest-only period for the remainder of the term.  It also gives you the ability to choose just how much you want to pay towards your mortgage.  You can make the interest only payment or you can decide to pay an additional amount towards the principal.

There are two options when looking at second mortgages - fixed rate second mortgages and Home Equity Lines of Credit (HELOC).

A fixed rate second mortgage has a rate and term that is fixed for the life of the loan.  The full amount of the second mortgage funds with the first mortgage and from that point forward the borrower makes principal and interest payments to pay back the loan.  It offers the security of a fixed rate and term for those who need to borrow the money all at once. 

A HELOC is the adjustable rate version of a second mortgage.  The rate for a HELOC is based on the government’s prime index.  Prime is currently at 4.00%.  When prime adjusts up or down, the margin specific to your loan will be added to it and your rate will be adjusted accordingly.  The money from a HELOC loan can be borrowed against similar to a credit card.  A credit limit is established and the borrower has the option of using as much or as little of the credit limit as they need at any given time.  Usually a HELOC loan has an interest-only payment option too, which gives you the ability to choose just how much you want to make towards your monthly payment. 

Either of these second mortgage programs works well to avoid mortgage insurance.  Whether you are paying mortgage insurance now or are purchasing a property and don’t have 20% for down payment, a second mortgage can usually cover the difference to make mortgage insurance disappear and save you money.

Mountain Resort Mortgage, Inc offeres competative rates for lot loans catering to your needs and requirments depending on how you intend to use the property.

If you intend to build on your lot, origination fees will be credited to subsequent loans with Mountain Resort Mortgage, Inc.

Please contact us at 877-953-6300 or 970-453-6300 for your own custom quote.

As with our lot loans,  Mountain Resort Mortgage, Inc. works with your specific needs to offer competative rates and personalized construction loan management.  We pride ourselves on prompt construction draw turn-arounds, attention to detail and our relationship with your general contractor.

Please contact us for more inforamtion and your own custom quote at 877-953-6300 or 970-453-6300.