Which Mortgage Loan?

There are many mortgage programs available these days.. and each one has its benefits. There are many factors that go into deciding which loan is best suited for your needs. At California Mortgage Co, we have the programs, the products, and the services to offer California residents the best possible rates, terms and closing costs based on their individual profile.
                 
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30 year Fixed

Most common loan. Also known as a "plain Vanilla fixed loan". Ideal if you will keep loan 10+ years. Interest Rate and Payment do not change for the entire term of 30 years. It self-amortizes to a Zero balance at the end of the loan.

15 year Fixed

Same terms as 30 year Fixed, only loans pays-off in 15 year. Payment will be higher than 30 year loan. Popular for refinances. Rate is generally 3/8 - 5/8 percent lower than 30 year loan.

7/23 Two step

30 year loan that has an initial interest rate and payment that is fixed for the first 7 years. These may be good choices if you know that you will be keeping the loan only 4-7 years. At the 7 year point, you have 3 options:
 

• To reset the interest rate and payment for the remaining 23 years. The interest rate will be calculated using a formula that will make your new rate approximately 3/8 - 3/4 percent higher than current market rates. They will be fixed for the remaining 23 years of the loan.
• To refinance the loan to another program. This can be done through your current or any other lender.
• To pay the loan off in full

5/25 Two step

Same as 7/23, only initial period is 5 years and remaining is 25.

1 year ARM

Most popular Adjustable-Rate-Mortgage. Interest rate and payment is fixed for initial 12 months. They change once every 12 months for the entire term of the loan(Generally 20 years). There are protection "Caps" that prevent catastrophic changes in the rate. Generally, these "Caps" are 1-2% every year and 5-6% over the initial rate for the entire loan. The initial rates are approximately 1.5-3% lower than 30 year fixed rates. These loans are popular with people that do not need the loan for a long period of time.

3/1 ARM

30 year loan with interest rate and payment fixed for initial period of 3 years. At this time, the interest rate and payment changes once every 12 months for the remainder of the loan. These generally offer rates approximately 3/8 - 5/8% lower than 30 year fixed loans. They are popular with people that will keep their loan 2 - 5 years.

5/1 ARM

Same terms as 3/1 ARM, only initial period is 5 years. These generally offer initial rates approximately 1/4 - 3/8% lower than 30 year fixed loans.

7/1 ARM

Same terms as 3/1 and 5/1 ARM, only initial fixed period is 7 years. These generally offer a slightly lower rate than the 30 year fixed These are popular with people who will keep their loan for 5 - 7 years.

10/1 ARM

Same terms as 3/1, 5/1, 7/1 ARMs, only initial period is 10 years. Unless you are financing over $207,000, this program is not recommended by us because the interest rate is often the same or higher than the 30 year fixed. If you are financing over $300,700, then this program may be ideal for you if you will keep the loan 8 - 10 years.

Option ARM

Offers five monthly payment options. To make the decision that is best for you, you will need to understand the features and benefits of each option. Click here for an illustration of your monthly loan statement and a brief description of the options that may appear.

B/C Loans (Sub-Prime)

These are loans that are offered to qualified applicants that may have recently filed for Bankruptcy, foreclosure, or have had late payments on their credit reports. There are also programs for people who cannot verify their income. These are referred to as "Band-Aid" loans or "Temporary Financing". Their sole purpose is to offer financing to these applicants until they can qualify for Conventional "A" financing. The interest rates and programs vary, based upon many factors of the borrower's financial situation and credit history.