Mortgage Rate Options
Fixed Rate
A fixed-rate mortgage is a type of home loan where the interest rate remains the same throughout the life of the loan. This stability allows borrowers plan their finances with confidence, as their monthly payments will not change. Typically, fixed-rate mortgages come in various terms, such as 15 or 30 years, making it easier for homeowners to choose a plan that fits their budget. This option is ideal for those who prefer predictability in their mortgage payments.
Adjustable ARM
An Adjustable Rate Mortgage (ARM) is a type of home loan that features an interest rate that can change over time, typically in relation to a specific benchmark or index. Initially, ARMs often offer lower interest rates compared to fixed-rate mortgages, making them an attractive option for buyers seeking lower initial payments. However, it's important to understand that after the initial fixed period, your monthly payments may increase or decrease based on market conditions. This can lead to potential savings in the short term, but also introduces some risk as rates fluctuate.
Interest Only
An interest-only mortgage is a type of home loan where the borrower is only required to pay the interest on the loan for a specified period, typically 5 to 10 years. During this time, the principal balance remains unchanged, which can result in lower monthly payments. However, once the interest-only period ends, the borrower must start paying both principal and interest, which can significantly increase monthly. It's essential to understand the long-term implications and plan accordingly when considering this type of mortgage.
Graduated Payment
A graduated payment mortgage is a type of loan that allows borrowers start with lower monthly payments that gradually increase over time. This option can be beneficial for those expecting their income to rise in the future, making it easier to manage initial costs. Typically, the payments increase at a predetermined rate for a set number of years before leveling off. It's a flexible solution for homebuyers looking to ease into homeownership.
Loan Program Options
Conventional Loan
A conventional loan is a type of loan that is not insured by the government. Conventional loans offer more flexibility and fewer restrictions for borrowers, especially those borrowers with good credit and steady income.
FHA Loan
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment.
VA Loan
The VA Loan provides veterans with a federally guaranteed home loan which requires no down payment. This program was designed to provide housing and assistance for veterans and their families.
Jumbo Loan
A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $806,500 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.