Mortgage Basics

The term Alt-A refers to a loan which is issued to a borrower with less than the ideal characteristics.  Alt-A loans have more risk than prime conforming loans which are purchased by Freddie Mac/Fannie Mae but are less risky than sub-prime loans which are issued to the riskiest borrowers.  Alt-A lo

There are a few basic features of an adjustable rate mortage that you should be aware of in order to adequately evaluate the risk versus reward that is associated to an ARM.

Balloon Mortgage – Definition

A balloon mortgage is a loan type where the borrower makes a fixed monthly payment for a fixed amount of time ranging from 5 to 15 years, and then is required to payoff outstanding principal balance on the home with a lump sum payment.  A balloon mortage uses a 30 year