Boca Raton mortgage brokers represent banks and other mortgage lenders who offer several types of mortgages. The most common type of mortgage is the fixed rate mortgage or FRM. A fixed rate mortgage offers an interest rate that remains constant throughout the duration of the loan. The interest rate is agreed upon by the lender and the borrower before the loan is made, and the borrower makes the same payment each month until the loan is payed of or until a foreclosure occurs. This mortgage type has the advantage of predictability.
An adjustable rate mortgage, or ARM, is a mortgage loan which presents an interest rate which varies periodically according to published indexes (calculations of complex market forces that affect lending). Adjustable rate mortgages allow lenders to adjust the interest rate to reflect fluctuation costs of lending, and may be beneficial to borrowers by offering lower initial payments. The downside to adjustable rate mortgages is that the borrower's payments may rise to a rate that makes them impossible to pay, forcing foreclosure. The Consumer Federation of America has characterized some adjustable rate mortgages as "predatory loans", or unfair loans made by lenders for the purpose of causing foreclosure.
A VA loan is a loan guaranteed by the United States Department of Veteran's Affairs. It is a loan backed for the Federal government offered to surviving military veterans or the spouses of surviving or deceased veterans. These loans are in place to provide eligible borrowers 100% financing in situations where private financing may not be available, with no down payment.
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