Understanding the most common types of mortgage loans available today
There are many choices when it comes to the types of mortgage loans you can apply for when buying a home. Each one comes with it’s own set of options, qualifications, and rules. But it’s important to understand the most common types of loans at their most basic level. Especially once your Lender starts talking about rates, points and qualifying ratios! So here are your options. It’s as simple as A, B, C, and F (hey, nothing is perfect).
So, what is a mortgage? By definition, a mortgage is a legal document that promises property to the lender as security for payment of a debt.
A: Adjustable-Rate (ARM)
This is a mortgage in which the interest rate floats up or down according to a specified index. The interest rate is “adjusted” at certain time intervals (such as six months or one year), usually having a “cap rate” or maximum rate of change per adjustment interval (such as 1%, or 4%). Terms such as “one year ARM” generally identify the adjustment interval (interest rate adjusted after one year).
B: Balloon
This is a unique type of loan, as it is rather short. You make a monthly payment for 5 – 7 years, based on a term of 30 years. There’s often a low interest rate, and it can be easier to qualify for this versus a traditional 30-year-fixed. A balloon mortgage can be an excellent option for many home buyers. There is, however, a risk to consider. At the end of your 5-7 year loan term you will need to pay off the outstanding balance. This usually requires you to either refinance, sell your home, or convert the balloon mortgage to a traditional mortgage at the current interest rate.
C: Conventional
These loans are neither insured nor guaranteed by the government. As such, conventional loans represent a greater risk to lenders than government backed loans. Conventional loans can start with as low as 5% down, but if you can put at least a 20% down payment (80% LTV) you can avoid paying private mortgage insurance.
F: FHA
Federal Housing Administration loans are available to all types of borrowers, not just first-time buyers. You can read more about the differences between a conventional loan and an FHA loan in one of our previous blogs.
F: Fixed Rate
The most common type of home loan is the fixed-rate mortgage. The interest rate remains the same for the life of the loan, so the principal and interest remain the same, too. This is one of the best reasons to buy vs rent, as rents rise over time where as most mortgages stay constant for the life of the loan.
If you’re interested in learning more, or would like to apply for a loan, contact our preferred lender, Keith Harris.
OVERALL GROWTH
OVERVIEW
With the 
-Launching the new Brambleton TV Merchant Series
“We were also very proud of those Town Center tenants who won awards, including Natalie Perkins of 
If you haven’t seen it yet, swing by and take a look. The model is still open, and it it is gorgeous – full of open space, granite counters, stainless steel appliances, and so many more amazing features.
We anticipate 2016 to be just as good of a year – or better! Real Estate is expected to stay strong and we hope to outdo this year’s numbers and continue to see prices slightly rise.
So why not go on-line to find a mortgage broker that can offer a low interest rate? Because the rate is only part of the equation. Is the broker charging discount points to be able to offer such a good rate? If there are points involved, the lower rate could results in a worse financial scenario for the borrower.
Sometimes it is important to be able to have a face-to-face meeting between the lender and the borrower. Many borrowers would prefer to hand deliver valuable and sensitive personal financial information versus sending it via email or some other electronic format. In addition, it is also comforting for some borrowers to be able to shake hands with the people that will be making the determination of whether a loan of hundreds of thousands of dollars will be approved.
The type of lifestyle you and your family enjoy is a key component on where to buy a home. Do you like a more Urban setting where shops, restaurants and amenities are close by? Maybe even within walking distance? Or would your family prefer a more tranquil Rural setting with a little more privacy? The “stage” your family is in plays a large part in this decision. Younger couples, and singles just starting out tend to want a more urban/city location. Couples that are ready to start a family might want a more suburban/neighborhood kind of feel to raise their children. Before finalizing your decision on location, it’s a very good idea to take a look around the areas in the daytime and at night. This will give the buyer a more comprehensive idea of the neighborhoods they are considering.
Where are your family and friends located? Is it important for you to be close to grandma? Or are you looking for that happy balance between close enough to visit, but not right next door.
Commuting to your work place is another major factor, especially in our area! Northern Virginia is a growing, busy place to live. Some people are more tolerant of a longer commute than others. Do you want to be within walking distance of public transportation? We have an extensive public transportation system that includes bus services, metro, VRE, carpools, commuter buses, and more. These options can help with commuting to work. Most people still like to drive themselves to work, so knowing how long your commute will be is useful information when deciding on the location of where to buy a home.
Families with school age children will want to consider school districts. Although our area has very strong school systems, the curriculum, teaching methods, and educational options available to the students can vary greatly. Buyers should definitely factor in the educational needs of their children and compare the different school options before deciding on where to buy.
Craftsman homes have an emphasis on natural materials — wood, stone, and brick. They tend to boast wide front porches. The interior has an open floor plan with features like built-in furniture, big fireplaces and exposed beams.
This style is reflective of “today’s modern”, with an emphasis on connecting the indoors with the outdoors. Contemporary homes tend to have an emphasis on energy efficiency, can be made from sustainable materials, and generally have lots of natural light throughout the home.
Reminiscent of the 1600’s, there are many variations of the Colonial style home due to the diversity of the early American settlers. Homes can be known for their symmetry, and are most often characterized by evenly spaced shuttered windows. Dormers, columns, and chimneys can also be evenly proportioned to complement its formal style.
The most common type of Colonial home is “Georgian” and it is much simpler in architecture. Like all Colonial styles, Georgian focuses on rigid symmetry. It is most often a box shape and is adorned with windows, which are typically five across, with shutters. They often have paneled front doors below a decorative portico.
The Prairie style was built based on the idea that a home should serve all practical needs and reflect simplicity. The Arts and Crafts Movement was very influential to its design and can feature many of the same concepts, such as built-in furniture, simple materials, and open floor plans. This home may also feature a long flat roof, rows of windows, horizontal lines, and organic patterns.
Sometimes called a row house but now more commonly known as a townhouse, it became popular in the early 19th century due to limited space and the financial benefits for the architect/builder. Efficiency and use of space is first and foremost and they are typically two or more levels with a traditional layout, side hallways, and smaller yards.
Also referred to as “Condos”, they are generally built like an apartment with many units in one building. In our area it refers to ownership of the property. Brambleton actually has townhome styled condos as well.
THE most important tip to buying your first home is to find an experienced Realtor and have an initial consultation. Your Realtor will lay out the entire buying process and give you an idea of what to expect, along with a timeline of the events leading up to you closing on your home. In today’s ever changing market place, being represented by a strong Realtor is paramount. New lending laws, called 
-What type of home are you looking for?
a certain amount and being comfortable with the payments at that amount can sometimes be different. Say you buy a house worth X amount of dollars, then the down payment and closing costs will be X, and the PITI (principal, interest, taxes, insurance) plus HOA/Condo fees will be X. Once you are comfortable with those amounts, you will have less anxiety looking at homes in your price range. Another reason to get pre-approved is to find out what type of loan you will be using. The type of loan – whether it’s conventional, VA, FHA, or some other program, could make a difference in your home purchase. For example, some condos are not FHA certified, meaning they would not qualify for a FHA loan. This would be important to know before you got your heart set on a condo only to find out you cannot purchase it with your preferred loan program.
Setting out to tour luxury homes can be a fun way to spend an afternoon, and a great way to get design ideas! But don’t set yourself up to be disappointed when you fall in love with a home who’s price is double (or more!) what you have been pre-qualified for. Know your price range, and stick to viewing homes within that budget. You can always incorporate some of those design elements you admire and give your new home that luxury feel.
Pay close attention to your home inspector at the 
Open houses bring people through your front door. Yes, some of those visitors will be people “just looking”, who have no intention of buying a home at the moment. However, they have friends, relatives, and co-workers that they might mention the home to. Open Houses also attract Buyers that are just starting out on their home search. A lot of new buyers like to get a feel for the area and what type of home they can afford by attending an Open House. A 
Open Houses provide great feedback to the listing Agent and the Seller. Whether it’s a neighbor or a potential Buyer, an experienced Agent is going to try to get as much feedback about the home as possible from the visitors. The kitchen may be updated but the bathrooms are smaller than the house a few doors down. Your yard is landscaped and well cared for, but the house across the street hasn’t seen a mower all season. Maybe last month 3 new families moved in, all with young children. This is the kind of additional feedback on the home and neighborhood that could possibly be helpful to the listing Agent and Seller. This is a great way to gauge the markets response to a home for sale.
Having your home on the market and keeping it 
Location: Most condominium complexes are located in an urban setting. If you want to be within walking distance of shops, restaurants, and amenities then a condo might be the right choice for you.
Location: Townhomes offer a more condensed living style than single family homes.
Location: Single family homes tend to have more privacy, because they have a larger “footprint”, meaning there is more space overall, and your house is not attached to your neighbors.