To help determine the best loan program for you, consider the following:
- How important is payment certainty?
If knowing that your payment will be the same every month is important, consider a fixed-rate mortgage.
- How important is rapid equity buildup?
If rapid equity buildup is a factor, consider a shorter amortization period, such as a 15-year, fixed-rate mortgage.
- Do you anticipate increasing or stable income?
If income growth is anticipated, you could take advantage of a lower start rate on an ARM or a temporary buydown.
There are many loan programs available so we have highlighted the programs more commonly offered today. Characteristics of each loan program are unique, so give us a call and we'll gladly go over the details of each and help you decide which program will best fit your goals.
- Interest rate does not change.
- Principal and interest (P & I) payment does not change.
- Fixed-rate mortgages fully amortize over a defined period of time (the loan term) and are paid in-full at the end of this period.
- Loan terms of 10, 15, 20, 25, and 30-years are available (not all lenders offer all loan terms).
- The shorter the loan term, the faster equity is built and the sooner the loan is paid off.
- Interest rate may change.
- Principal and interest (P & I) payment fluctuates as the interest rate adjusts.
- ARMs transfer to borrowers a portion of the risk associated with a changing economy.
- In exchange for sharing the risk, ARMs offer borrowers initial interest rates that may be substantially lower than fixed-rate mortgages.
- The lower interest rate may help borrowers qualify more easily.
- There are no reductions to the principal amount.
- There is no provision for negative amortization.
- Payments may increase up to an amortized amount, but the loan balance itself does not increase.
- Generally, interest-only payments are limited to the first 5, 10 or 15 years of the loan.
- After that, the loan is amortized for the remainder of its term.
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