Which Loan is Right for You
Nov 22, 2016 | Mortgage Tips
The right conventional loan program for you heavily depends on your age, family size and current financial situation. With so many different loan choices out there, it can be difficult to decide which one will best fit your needs. Learn about the different types of loans below so you can make an educated decision.
30-Year Fixed Loan
This loan keeps interest and payments the same for the entire duration of the loan. After 30 years, your loan will be paid off. This type of loan is more expensive than an adjustable-rate option, but it provides payment stability. This loan is typically a good option for people who plan to live in their homes for 10 or more years.
Loan Like a 30-year fixed loan, your payments will be kept the same and your loan will be completely paid off after 15 years. This loan will have higher monthly payments compared to the 30-year fixed loan, because you are paying your loan off in a shorter timeframe. This loan will allow you to build equity more quickly, but the high payments may limit the homes you can afford.
Adjustable Rate Mortgages
An adjustable rate mortgage (ARMs) is when your interest rate adjusts depending on market trends. This type of loan generally offers a lower initial rate than a 30-year fixed loan. There are many different types of ARM loans, but it’s important to know that when your initial rate period ends and your loan adjusts, you may be paying more (with higher current market trends) or less (with lower current market trends). This type of loan is typically better for people who are planning to sell their homes in a certain time frame.
Other Types of Loans
VA loans are designed to offer long-term financing to veterans and their spouses. If you qualify for this type of loan, you can enjoy benefits like no down payment, no prepayment penalty, and no private monthly mortgage insurance.
A United States Department of Agriculture (USDA) loan was once considered a farm loan, but is now an option for low to moderate income families who live almost anywhere in the country (outside of a major metropolitan area).
Discuss Your Mortgage Options Today
For more information on different loan options, be sure to contact one of our experienced loan officers today! We would be happy to meet with you and discuss which option will best fit your particular needs.