Non-traditional mortgage products play a key 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.