MORTGAGE PRODUCTS

 

Adjustable Rate Mortgage (ARM)

An adjustable rate mortgage differs from a fixed rate mortgage in many ways. With a fixed rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable rate mortgage, the interest rate changes periodically, by adding a margin to the borrower's index, and payments may go up or down depending on the published index. The initial rate and payment amount on an adjustable rate mortgage will be fixed for a limited period of time, ranging from just 1 month up to 10 years.

1 Month Adjustable Rate Mortgage

Also known as the "Many Options ARM" or "Pay Option ARM." The payment rate and the interest rate work independently of each other which allows for greater flexibility in payment options. The payment you are required to make changes annually. The actual interest rate can change monthly.

Fixed Rate Mortgage

A fixed rate mortgage is a loan in which the monthly principal and interest payments remain the same throughout the life of the loan. The terms of the mortgage can be anywhere from 5 to 40 years. The most common mortgage terms are 30 and 15 years. With a 30-year fixed rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15 year loan allows you to repay your loan twice as fast and save more than half the total interest costs.

Interest Only Feature

With an interest only mortgage loan, the payment the borrower is required to make consists entirely of interest. This gives the borrower the flexibility of a lower monthly payment, but still allows for principal payments, if the borrower chooses to do so.
The interest only term lasts for a specific amount of time, generally 5 or 10 years. At the end of that term the borrower either refinances, pays the balance in a lump sum, or begins to pay toward the principal. When the borrower begins to pay the fully amortized payment, the payment is spread out over the remaining term of the loan, which can cause the payment to increase significantly. The interest only feature can apply to both fixed and adjustable rate loans.

Balloon Mortgage

A balloon mortgage is a short-term fixed-rate loan which features small payments for a certain period of time and one large payment for the remaining amount of the principal (balloon payment), paid at the time of the final installment. With a balloon mortgage, the payment is the amount required to pay off the mortgage in full over 30 years but after a fixed period of time (from 5 to 15 years) the loan has to be paid in full. When the loan matures, you must pay the loan off in cash (Balloon Payment) or refinance. The advantage of this type of loan is that the initial rate is usually lower than a normal fixed rate loan. Balloon loans are popular with those expecting to sell or refinance their property within a definite period of time.

CalPERS Home Loan

The CalPERS Member Home Loan Program is a benefit available to help CalPERS members with their home financing needs. As a qualified CalPERS member, you may purchase a home or refinance your existing home using the Program. You will be doing business with a CalPERS certified home loan lender who is committed to giving you the service you deserve at a competitive interest rate.

Reverse Mortgage

As more people learn about the versatility of reverse mortgages, this financial planning tool has gained significant popularity. Today, record numbers of consumers are using reverse mortgages to remain in their homes to supplement their retirement income, pay for health care expenses, make home modifications, or simply establish a cash revenue for emergencies.