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Programs We Offer:
Fixed-Rate Mortgage

Fixed-rate mortgages (also known as FRMs) offer the same interest rate, monthly principal and interest payment throughout the entire term of the loan. The fixed-rate mortgage loan is the "most popular" choice because it offers stability and predictable monthly payments. Capital Advantage Mortgage offers a variety of terms in both conforming and jumbo loan amounts. The longer the term, the lower the monthly payments and the more cash you'll have for other expenses. With a shorter term, you'll have higher monthly payments and you'll qualify for a smaller loan amount, but you'll save on interest costs over the life of the loan and build your equity faster.

Consider a Fixed-Rate Mortgage if you:

  • Prefer regular payments with no surprises
  • Are on limited or fixed incomes
  • Plan to stay in your home a long time
  • Are purchasing or refinancing at a time when interest rates are comparatively low

Cons:

  • Higher initial interest rate than other types of loans
  • Prevents you from benefiting from lower interest rates in a falling rate environment unless you refinance

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Adjustable-Rate Mortgage (ARMs)

Adjustable-rate mortgages (also called ARMs) feature an interest rate that periodically adjusts with changing market rates. ARMs are available in conforming and jumbo loan amounts. The ARM allows a lower interest rate if rates are falling. Your interest rate will go down and you'll benefit from lower monthly payments, but it also means that your payments will go up if interest rates rise. The initial interest rate on an ARM is usually lower than the lifetime interest rate on a fixed rate mortgage (FRM).

How are ARM adjustment figured? They are generally determined by:

  • Index: Published economic indices such as U.S. Treasury Securities or London Inter-Bank Offered Rate (LIBOR) that are used to direct the adjustment.
  • Margin: A fixed percentage (usually two to three percent) that is added to the index at each adjustment period.
  • Rate Cap: Typically the maximum amount your rate can increase or decrease per adjustment period (2%) and over the life of the loan (6%). This protects you in case of volatile market swings.

    • Consider a Adjustable Rate Mortgage if you:

    • Want to save money in the first few years
    • Plan to move or refinance in a few years
    • Are purchasing or refinancing at a time when interest rates are comparatively high

    Cons:

    • Unpredictability of interest rates could present larger monthly payments than budgeted
    • ARM rates frequently rise to a level higher than the rate on an FRM that could have been obtained at the same time

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    Balloon Mortgage

    Balloon Mortgages have a fixed rate for seven years, followed by a large "balloon" payment requiring repayment of the entire loan balance. Monthly payments are low because the interest rate is generally lower than a fixed rate mortgage (FRM) and payments are amortized over 30 years.

    Consider a Balloon Mortgage if you:

    • Require lower monthly payments to allow you to qualify for a larger loan amount
    • Want predictable fixed monthly payments
    • Plan to sell or refinance your home before the loan expires
    • Expect to come into money by the time the balloon is due

    Cons:

    • May have to convert to a different loan type
    • Conversion rate will almost always be higher. Refinance rate may be higher or lower, depending upon the interest rate environment, and closing costs will have to be incurred

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    FHA Mortgage

    FHA Mortgages help low-to-moderate-income homebuyers purchase homes with low down payments (approximately 3%) and flexible qualifying guidelines. These loans are insured by the Federal Housing Administration (FHA), which sets loan limits that vary by area. With an FHA mortgage, you can use a gift or unsecured loan for down payment and closing costs. Available in fixed-rate and adjustable-rate mortgage options.

    Consider a FHA Mortgage if you:

    • Have limited savings and/or moderate incomes and don't qualify for conventional loans
    • Need a low down payment and expanded debt-to-income ratio
    • Need flexibility with regard to credit
    • Would like your loan to be assumable (along with the current interest rate) by the next owner when you sell your home; this is seen as a strong benefit in certain rate environments

    Cons:

    • Loan limit in a particular region may be lower than required
    • Higher interest rates than a conforming loan
    • Generally requires more documentation
    • Borrower pays monthly mortgage insurance premiums for a period of time, determined on initial Loan to Value.
    • Borrower must pay an up-front mortgage insurance premium at closing or include it in their loan amount

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    VA Mortgage

    VA mortgages offer the opportunity for veterans to buy a home up to a specified amount with no down payment. Loans are administered by the Department of Veterans Affairs, are assumable and have more flexible requirements than either FHA or conventional home loans.

    Consider a VA Mortgage if you:

    • Are a qualified veteran, reservist, active serviceperson and their spouses (check with your local VA office to see if you qualify)
    • Qualified borrowers who have limited funds for down payment and closing costs

    Cons:

    • Loan limits apply
    • Available in fixed-rate mortgage only

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    Jumbo Mortgage

    Currently a jumbo mortgage is a purchase or refinance loan that exceeds $300,700 for a single-family home (1). It is also called a non-conforming loan because it does not conform to the loan limits set by Fannie Mae (The Federal National Mortgage Association or FNMA) or Freddie Mac (The Federal Home Loan Mortgage Corp. or FHMLC). Available in fixed-rate and adjustable-rate mortgage options.

    Consider a Jumbo Mortgage if you:

    • Want to finance larger and/or more expensive properties and can handle larger monthly payments

    Cons:

    • Higher interest rates than those for conforming loan amounts
    • More income required to qualify

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