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Home Mortgages by Mind Map: Home Mortgages

1. Bank of America offers five types of home mortgage loans to customers.

1.1. There are six main mortgage loans available for customers to choose from.

1.1.1. An Affordable Loan Solution mortgage is for customers who cannot afford a down payment greater than 3 percent.

1.1.2. Fixed-rate mortgages offer fixed interest rates throughout the loan term.

1.1.3. Jumbo loans require a high down payment and include high interest rates. These loans are available with fixed rates and adjustable rates.

1.1.4. FHA and VA are government mortgage loans. Customers must meet certain criteria to qualify. Both types of mortgages offer fixed interest rates. Customers of VA mortgages may require no down payment and low interest rates. The FHA mortgage option however, offers low down payments.

1.1.5. ARMS gives an opportunity to have a fixed interest rate for for a 5-year period after which the loan will have fluctuating yearly interest rates and therefore increased or decreased monthly payments .

2. Wells Fargo has three types of home mortgages that are frequently used by borrowers.

2.1. The three main mortgages offered are the fixed rate mortgage, adjustable -rate mortgage (ARM), and Jumbo loans, and accommodation with VA and FHA loans.

2.1.1. Fixed rate - principal and interest payments remain the same throughout loan payment. These loans can also be adjusted temporarily. Thus homeowners do not have to worry about any increase in the interest rate during the loan's lifespan. However, total interest rates may be higher than short-term loans (Wells Fargo, 2018).

2.1.1.1. The principal and interest rates for Adjustable-rate mortgages are frozen for a specific period and is later adjusted to a new yearly interest rate. Interest rates can only fluctuate within a specified minimum and maximum rate. Thus, monthly rates will fluctuate.

2.2. Interest rates as low as 3 percent on fixed rate mortgages and VA and FHA loans

3. Quicken Loans offers nine types of mortgage loans from which customers can choose. There are no penalties for early repayments.

3.1. Quicken Loans offers Jumbo loans, 15-year fixed mortgage, VA loans, 30-year fixed, FHA loans, YOURgage, and adjustable rate mortgage (ARM).

3.1.1. ARM has a low but fixed rates at the beginning of the term; usually 5- 10 years with 3.85% interest rate or 4.965% APR. The rates fluctuate as the term progresses.

3.1.2. YOURgage operates like a conventional but enables the customer to customize the term period for the loan. Interest rates are fixed.

3.1.3. FHA is a loan option of leniency. Customers can qualify for such loan having low income and low credit scores. The down payment is only 3.5%. The loan however, must be insured by FHA.

3.1.4. VA Loans benefit the veterans whom, in most cases do not require a down payment on their loans. Low credit scores are accepted and loans are issued with low interest rates. Customers must meet the the VA requirements in order to be eligible for loans.

3.1.5. Jumbo loans usually offer rates that are lower than conventional loans and a higher borrowing capacity.

3.1.6. The 15-Year fixed mortgage requires only 3 percent down payment. The total interest paid is less than the total interest of a 30-Year fixed mortgage. The monthly payments for the 30-Year fixed mortgage however, are less than the 15-Year fixed mortgage.

4. There are several factors to consider when choosing a mortgage.

4.1. Repayments must be affordable. Meaning that the borrower should afford to pay the monthly payments - trying to keep payments less than 20 percent of the monthly salary.

4.2. Interest rate should be constant and as low as possible to keep repayments low and predictable. A low APR is also important to consider as it determines the yearly payment.

4.3. Credit scores can affect one's ability to qualify for a mortgage. Therefore the higher one's credit score the greater one's chances of qualifying for the loan. Interest rates and down payments can be reduced as a result of a high credit score.

4.4. All costs including closing fees must be considered when identifying a suitable rate for the mortgage. These are costs incurred by the customer.

4.5. The greater the down payment, the less that will be owed to the lending agency.