Popular Loan Definitions

The following page provides you with a list of popular terms used in the Mortgage Industry with a focus on the different loan options you can choose from at Pacific Mortgage Group. You can click on the “learn more” link found next to each loan type for a more detailed definition, as well as, information about the loan process, fees, requirements etc..


Adjustable Rate Mortgage - Learn More

An Adjustable Rate Mortgage (ARM) is a loan where the interest rate is tied to an economic index. The interest rate on the loan fluctuates up or down during the term of the loan, depending on the agreed-upon index. The borrower is protected from intense fluctuations in the interest rate by applying a limit on how much the interest rate can change on an annual basis, as well as a lifetime cap, or limit, on changes in interest rates.


Conventional Loan - Learn More

Conventional Loan is a mortgage loan that is not insured by any government agency, it is the most common type of mortgage. There are conforming conventional loans and non-conforming conventional loans. Conforming conventional loans follow the Fannie Mae and Freddie Mac guidelines. Non-conforming loans do not follow those guidelines. Rates, terms, and fees, differ on conventional loans, hence, finding a good, dedicated mortgage agency is important to bringing you the best rates on your loan.


FHA Loan - Learn More

FHA Loan is a mortgage issued by a federally qualified lender and is insured by the Federal Housing Administration (FHA). The main purpose of the FHA program was made to promote home ownership. Applying for an FHA loan must go through an FHA-approved mortgagee, for example, Pacific Mortgage Group, LLC. Interest rates are decided on by a mutual agreement between the borrower and the lender – they are not set by the Federal Reserve Board. The FHA maximum loan amount varies from one county to another, there are no income limits on FHA loans and any United States resident may obtain an FHA loan as long as the property purchased will be the borrowers principle residence and is located in the United States.


15 year fixed rate mortgage - Learn More

Similar to the 30 year fixed rate mortgage, a 15 year fixed rate mortgage is a loan where the interest rate stays the same for the 15 year period. With the 15 year loan you will generally pay a lower interest rate, meaning less interest paid over the duration of the loan, allowing you to grow your equity faster than other loans with longer terms.


Jumbo Loan - Learn More

A Jumbo Loan is a mortgage exceeding the maximum loan limit which was set by Fannie Mae and Freddie Mac. Jumbo mortgages are mostly used for large, single-family homes and come under non-conforming loans along side subprime loans. They usually have a higher interest rate and some extra underwriting is required.