www.centralmdmortgage.com - Mortgage Types

ELIGIBLE PROPERTIES

Central Maryland Mortgage Corporation offers financing for purchases, refinances or debt consolidation of residential property throughout the state of Maryland. Loans are available for primary residences, second homes, vacation homes and residential investment properties. We do not offer loans for commercial or "mixed use" properties.

FIXED RATE LOANS

The most popular residential mortgage loans are fixed term, fixed payment loans. These are available in terms ranging from 10 to 30 years. Click here to apply online.

ADJUSTABLE RATE LOANS (ARMS)

An ARM is a type of mortgage, which is fixed for an initial period ranging from 1 to 10 years, that adjusts annually afterward for the duration of the loan. ARMs are typically 30-year terms, and there is a maximum annual adjustment cap, usually 2%, and a maximum lifetime adjustment cap, usually 5% to 6% above the start rate. The rate on an ARM can also go down below the start rate, if the index upon which it is based (a common index is the one year treasury bill) declines during the life of the loan. Click here to apply online.

BALLOON LOANS

A balloon loan is amortized for a longer period of time than the term of the loan, thus resulting in a lower payment. The most typical balloon loan is a 15/30, which means it is a loan with a 30-year amortization, but it balloons in 15 years. If you have not paid additional payments toward the principal, sold the home or paid off the loan, you will have a balance due at the end of 15 years. This balance can be refinanced at that time. Balloon loans are popular because they offer a lower payment for people who don't plan to be in the home for the long term, such as a young couple buying a starter home, or a couple approaching retirement, whose housing needs are going to change. Click here to apply online.

5/25 and 7/23 LOANS

These loans are a different sort of balloon loan. The rate is fixed for a set period of time, either 5 or 7 years, and then it adjusts ONCE for the reminder of the term, which is typically 30 years. There is a formula for how the adjustment is calculated, along with a maximum rate cap, and you will be informed several months in advance what your new rate will be. You can either convert to the new rate, which sometimes required a "modification fee" of a few hundred dollars, or you can refinance the remaining balance into a new loan of your choosing. These loans are also popular for buyers who do not plan to remain in their home for a long period of time, as it offers a below-market rate for several years. Click here to apply online.