• Full/Alternative Documentation- Full verification of all income and assets.
• Reduced Documentation - This program eliminates the need to verify income.
• No Ratio Program - The No Ratio Program is offered for those borrowers with a strong asset base, steady employment, and who meet the definition of perfect credit.
• No Doc Program - The Program is offered to those mortgagors with perfect credit. No exceptions may be made to the guidelines concerning perfect credit. Income, assets and employment must not be stated on the loan application nor are they verified. Income, assets and employment must not be stated anywhere within the loan documentation.

You've probably found that there are a myriad of mortgages out there--and that the mortgage you choose could save--or cost--you thousands of dollars. But don't let that overwhelm you. Choosing a mortgage doesn't have to be as complicated as it may appear. Just make sure you sit down with your lender, broker, or real estate agent and discuss your options and how they might benefit you. There are only a few important things to consider when selecting your mortgage.

Ask yourself:

• -What is my current financial situation?
• -How might it change?
• -How long do I intend to keep this house?
• -How comfortable would I be with the possibility of my payments increasing?

Keep these things in mind as you consider your mortgage options. And, though there may seem to be a lot of loans on the market, there are really only three kinds of mortgages: fixed mortgages whose interest rates and monthly payments remain unchanged, adjustable mortgages with rates and payments that increase or decrease with the market, and those that fall somewhere in between and are a sort of hybrid of the two first types.

You've probably heard of the 30-year fixed rate mortgage. It is the most common in the U.S. There are also 15-year (and even 10- and 20-year) fixed rate mortgages, which allow you to pay off your mortgage in less time, with less interest. A fixed rate loan is one in which principal and interest are amortized, or spread out, evenly over the term of the loan, so that both interest rate and monthly payments remain unchanged for the life of the loan.

Interest rates fluctuate constantly. Fixed rate mortgages protect you from the risk of rising interest rates. So, if interest rates are particularly low when you purchase your new home, or if you expect them to rise, a fixed rate mortgage could be a wise investment. On the other hand, unlike adjustable rate mortgages (ARMs), fixed rate loans won't take advantage of falling rates. Since you're locked into one rate for the life of your loan, you could end up with interest higher than current market rates in the years to come. At that point, however, refinancing might enable you to take advantage those lower rates.

The 30-year fixed rate mortgage is the most popular, and easiest to qualify for. It offers the lowest monthly payments of any of the fixed-rate mortgages, and is therefore the most affordable for many buyers. Predictable low monthly payments for the life of the loan make this the best option for many people.

Adjustable rate mortgages (commonly called ARMs) are flexible loans with interest rates and monthly payments that rise and fall with the economy. With an adjustable loan, the borrower shares in the benefits and risks of having the loan tied to market changes. Because the borrower shares in the risk of rising rates, lenders are able to offer lower initial interest rates than on fixed rate mortgages. The interest rate on your loan is then adjusted periodically according to whatever market index you chose when selecting your ARM.

Interest rate and monthly payment can change every six months, once a year, every three years, or every five years. For example, a one-year ARM has an adjustment period of one year, which means that the interest rate and monthly payment can change once a year. The frequency and dates of adjustments are established when you apply for your loan.

The interest rate on an adjustable mortgage changes according to a financial index. You may choose an ARM tied to any one of a variety of market indexes, such as CDs, T-Bills, or LIBOR rates. When your interest rate is up for adjustment, your lender will take the current rate of the index to which your loan is tied and add a margin, a certain set number of interest points laid out in your loan agreement, to determine your new rate. So, your interest rate and monthly payments could increase or decrease over the life of your loan, depending on the activities of the market.

Caps set forth in your loan agreement limit the amount by which the interest rate can increase at each adjustment. And ceilings, or lifetime caps, limit the total rate increase over the life of the loan. So, if you have a typical one-year ARM, your annual rate increases may be capped at 2%, which means that your interest rate can never increase by more than 2% over the previous year. And your loan may have a lifetime rate cap of 6%. So, if you had an initial interest rate of 5%, the highest interest rate you could ever pay would be 11%. Caps protect you from drastic changes in interest rate, but do not guarantee you the stability of a fixed rate loan. With an ARM, you exchange the possibility of lower interest rates for the possible risk of rising rates.

An ARM might benefit you in several ways. ARMs usually come with initial interest rates that are 2-3 points lower than those on comparable fixed-rate mortgages. The lower initial interest rate can help you qualify more easily and afford the house you want to buy. You will most likely qualify for a larger loan with an ARM than with a fixed rate mortgage. You might also want to consider an ARM if you plan to move in a few years, so are not concerned about the possibility of rate and payment increases. If you plan to move within 5 years, a 5-year ARM would even give you the advantages of a lower interest rate with none of the risks. And, even if you plan to live in your new home for longer, it might be safe to take the risks involved in an ARM if you expect your income to increase enough to cover potential increases in payments, or if you expect rates to fall.

Watch Out!

Some adjustable loans offer payment caps, which limit the amount by which your monthly payment can increase. This might sound appealing, but these caps do not limit the amount by which interest can increase. So, payment caps can lead to deferred interest. If interest rises by more than your payment cap requires you to pay, the additional interest not added to your payments is added to the unpaid balance of your loan. This is called negative amortization. Your monthly mortgage payments do not cover all the interest due on your mortgage balance, and it actually increases. Interest can then be charged on the amount added to your debt as well. So, with a negative amortization ARM, it is actually possible for you to owe more later in the loan term than you did at the beginning.

Negative amortization can also occur when lenders offer first payments that don't cover the cost of the principal and interest. Watch out for negative amortization, and don't let it be a danger for you.

You should also be aware that, if the initial interest rate on your loan is particularly low, you are probably receiving a "discounted" rate. If so, your payments will rise at the first adjustment even if market rates do not.

There are a large variety of ARMs available. If you choose an adjustable mortgage, one can probably be found tailor-made to fit your needs. So, don't be afraid to ask lots of questions and find out all your options before choosing your mortgage. You should be able to find a lender who can give you the loan you want.

SYNOPSIS: A conventional long-term, fixed-rate, level-payment loan that meets the loan limit and property and borrower guidelines of FNMA and FHLMC. The loan is not assumable and no penalty is assessed for prepayment.

REQUIREMENTS: Maximum Loan Amount: $359,600

Term: Fully amortizing over 30, 25, 20, 15, or 10 year terms.

Eligible Properties: Single family one-unit residences (call for information on 2-4 unit properties), including FNMA-approved condominiums and dwellings in Planned Unit Developments (PUDs) and townhouse projects.

A conventional long-term, fixed-rate, level-payment loan that exceeds the loan limit guidelines of FNMA and FHLMC. The loan is not assumable and no penalty is assessed for prepayment.

Also know as Jumbo Mortgages.

REQUIREMENTS: Minimum Loan Amount: $359,600

Term: Fully amortizing over 30, 25, 20, 15, or 10 year terms.

Eligible Properties: Single family one-unit residences (call for information on 2-4 unit properties), including FNMA-approved condominiums and dwellings in Planned Unit Developments (PUDs) and townhouse projects.

1-, 3-, 5- and 7-year Adjustable Rate Mortgages (ARMs)

If you think interest rates will remain relatively stable and expect your income to increase over the next few years, an ARM plan may be the right choice for you. The interest rate on these loans fluctuates periodically in response to changing market conditions. As the interest rate fluctuates, your mortgage payment will be adjusted up or down. Rate and payments adjust at the end of 1, 3, 5, or 7 years, and every year thereafter. And ARMs come with adjustment caps, giving you the security of knowing that your rate can never go above a certain level. Another advantage of an ARM is a lower initial interest rate; the initial rate on the 1-year ARM is typically 2-3 percentage points below conventional fixed-rate loans. This lower interest rate and lower initial monthly payment may enable you to qualify for a larger home loan.

Eligible Properties: Single family one-unit residences (call for information on 2-4 unit properties), including FNMA-approved condominiums and dwellings in Planned Unit Developments (PUDs) and townhouse projects.