Non Traditional Mortgage Products

Non-traditional mortgage products play an important role in mortgage banking. For example, adjustable rate mortgages (ARMs) have advantages for both the borrower and the lender. Since the borrower is sharing in the possible interest rate risk in the future, the starting rate for an ARM is lower than that of a fixed rate mortgage. The calculations for an adjustable rate mortgage can be challenging; therefore, an example will be presented to show the new maximum interest rate for a borrower with rate caps. FHA loans also fall in the non-traditional mortgage category and this course will detail terminology and basic math to calculate the loan amount for this type of loan. Details for VA loans will be explained along with information for Rural Housing loans.


The course covers the following objectives:

 - Understand the different components in an adjustable rate mortgage (ARM)
 - Learn how to calculate the interest rate for an ARM
 - Know the basic eligibility rules for FHA loans
 - Understand the Upfront Mortgage Insurance Premium (UFMIP) for FHA loans
 - Review the VA loan eligibility requirements
 - Understand the VA Funding Fee
 - Define the different types of Rural Housing loans
 - Understand the requirements of Guaranteed and Direct Loans


The course covers the following topics:

 - The mechanisms for an adjustable rate mortgage, including the index and margin
 - How caps are utilized in figuring out the interest rate for an adjustable rate mortgage
 - ARM terminology, including hybrid ARMs and pre-payment penalties
 - Benefits of the FHA 203b program for borrowers
 - Minimum investment requirements for the FHA program
 - Terminology specific to FHA loans
 - Basic eligibility criteria for a VA home loan
 - Terminology specific to VA loans, such as the funding fee
 - Details for rural housing guaranteed loans and direct loans


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