Loan Programs

Fixed Rate Mortgages (FRM)
The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime.

Adjustable Rate Mortgages (ARM)
Adjustable-rate mortgages include interest payments which shift during the loan’s term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting.

Hybrid ARMs (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
Hybrid ARM mortgages combine features of both fixed-rate and adjustable rate mortgages and are also known as fixed-period ARMs.  This option is perfect if you plan to move 3 or more years down the road.

Bank Statement Loan
This program is for self employed borrowers only.  Bank statements are allowed as an alternative to tax returns as verification of income.  You must have been self-employed for at least two years.  Personal or Business bank statements can be used to calculate income for 12 or 24 months.  This option is perfect for those with excellent income but the tax returs don't confirm this for various reasons, such as lots of expenses, increasing income in the last twelve months, etc.

RD - USDA Loan
The RD or Rural Housing Loans is a USDA No Money Down Loan.  Although this program has limits with regard to income and address, most of Maine allows this program with generous income limits that all most home buyers to qualify.

FHA Loans
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment.

VA Loans
VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership.

Interest Only Mortgages
Interest only mortgages are home loans in which borrowers make monthly payments solely toward the interest accruing on the loan, rather than the principle, for a specified period of time.  Home equity lines often start out as Interest Only Mortgages.

Jumbo Loans

Jumbo Loans are mortgages where the borrowed amount is more than the standard "conventional Loan" limits.  The conventional loan limit is presently at $484,350 in Maine.  Any mortgage over that is considered a Jumbo Loan and often has more strict underwriting guidelines. First Portland offers great rates for this and most loan programs.

Components of an ARM
Prior to choosing a home loan, you should know the advantages and risks of adjustable-rate mortgages to make an informed, prudent decision.  Important things to ask are... What is the index and margin?  What are the caps.

Commonly Used Indexes for ARMs
This article includes a list of the most commonly used indexes by ARM lenders that affect ARM mortgage rates.

Balloon Mortgages
Balloon mortgages include a note rate that remains fixed initially, and the principal balance becomes due at the end of the mortgage term.

Reverse Mortgages
Reverse Mortgages allow senior homeowners to convert a portion of their home equity into cash while still living in the home.

BuyDown Mortgages
Buy Down Mortgages or Graduated Payment Mortgages are loans in which mortgage payments increase annually for a predetermined period of time (e.g. one, two or three years) and becomes fixed for the remaining duration of the loan.  

What kind of loan program is best for you?
Should you get a fixed-rate or adjustable rate mortgage? A conventional loan or a government loan? Deciding which mortgage product is best for you will depend largely on your unique circumstances, and there is no one correct answer.