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    Email: nick@sundialcapitalllc.com


    The fully amortizing fixed rate loan provides a popular option for first-time homebuyers and repeat buyers alike, because of the fixed monthly payments and 30 year term. With a fixed interest rate, the mortgage payment won’t increase due to a change in the market. Because a shorter term mortgage isn’t always an affordable option for borrowers, a 30-year mortgage is attractive to many consumers.

    The FNMA High Balance loan program offers the same fixed rate benefits but provides for higher loan limits for properties in specific high-cost areas. High-balance loans are considered to be between $424,000 and $636,150. The amount is determined based on where the property is located.


    A mortgage loan in which the interest rate changes based on a specific schedule after a “fixed period” at the beginning of the loan, is called an adjustable rate mortgage or ARM. This type of loan is considered to be riskier because the payment can change significantly. In exchange for the risk associated with an ARM, the homeowner is rewarded with an interest rate lower than that of a 30 year fixed rate. When the homeowner acquires a one year adjustable rate mortgage, what they have is a 30 year loan in which the rates change every year on the anniversary of the loan.

    However, obtaining a one-year adjustable rate mortgage can allow the customer to qualify for a loan amount that is higher and therefore acquire a more valuable home. Many homeowners with extremely large mortgages can get the one year adjustable rate mortgages and refinance them each year. The low rate lets them buy a more expensive home, and they pay a lower mortgage payment so long as interest rates do not rise.

    The loan is considered to be rather risky because the payment can change from year to year in significant amounts. Unless the buyer plans to quickly flip the property or has plenty of other assets and is using an interest-only loan as a tax write off, almost anyone taking adjustable rates should try to pay extra in order to build up equity in case the market turns south.


At Sundial Capital, we understand time is money. That is why we use our efficient process to close the average loan in 14 days. Check to see if you qualify now!