Rather than just picking a generic mortgage, you need to find the mortgage loan that best fits your specific needs and goals. There are a whole variety of loans available.
Fixed rate mortgages have the same rate and the same mortgage payment from the first payment through the last. With a mortgage payment that stays the same, this is the most stable and conservative loan you can get. It makes the most sense to take on a fixed rate if you plan to be in the home (and the mortgage) for a long time. Mortgage rates move up and down based on the condition of the economy. Rates are usually lowest when the economy is struggling, and highest when the economy is healthier. If you can lock in a low rate for the life of your loan, a fixed rate is usually the way to go. Fixed rate mortgages are available with terms from 10 years all the way to 40 years, but the most popular term is the 30 year fixed rate mortgage. Mortgages with shorter terms are more often used in refinances, and they can help you pay off your mortgage quicker and build more equity in your home.
Adjustable mortgages start at one rate and payment, but over time the rate of interest will change. The rates on adjustable loans are lower than with fixed rates, because you are taking on more of a risk. ARMS are best for those who don’t expect to stay in the home long term, or those who are sure that their incomes will grow, so they will be able to afford the higher mortgage payment down the road. Adjustable rate mortgages can offer much lower rates and better cash flow than fixed rate loans, and they have safety features (yearly and lifetime rate caps) built in so that you still have protection even if rates do go up. ARM loans make the most sense when the fixed rates are high, and when there is a big spread between the fixed rate and adjustable prices.
Adjustable rate mortgages are available with initial fixed terms of 1 year, 3 years, 5 years, 7 and 10 years. The lower the fixed term (before it becomes an adjustable) the lower the rate should be, so a 1 year ARM will have very low pricing, while a 10 year ARM will be priced close to what a fixed rate would go for. ARMs aren’t for everyone, but if these fit your needs and you are willing to take on some of the risk, they can be a way to save a lot of money on your mortgage.
Conventional loans are the backbone of the housing industry. These loans are backed by Fannie Mae or Freddie Mac, and cover a whole variety of fixed rate and adjustable mortgages. Conventional loans are available up to the conforming loan limits and are best for well qualified home buyers and home owners with good established credit and who meet the conforming guidelines.
FHA loans are loans guaranteed by the government that are designed to help more people obtain home ownership. At one time FHA loans were used mostly by first time home buyers, but as it has gotten harder to qualify for conventional mortgages, FHA loans are now the best alternative for more and more home buyers and home owners. FHA allows a minimum down payment of only 3.5%, and there are ways to buy with no money out of your own pocket. FHA mortgages are available as fixed rates or adjustable mortgages. In today’s market FHA loans may be the best way to buy or refinance a home.
203K rehab loans are a way to buy and improve the property with the same loan. So many properties on the market require repairs or improvements in order to even be able to get financing. Other properties are outdated and modernizing the homes will add value. The FHA 203K rehab loans is the solution to these problems and it is available for purchases or refinancing.
VA, or Veterans Administration loans, are mortgages for active duty military or military veterans and their spouses. VA mortgages are true 100% financing and are available with no down payment. Instead of mortgage insurance, VA mortgages have a one time funding fee which is added into the loan. This is a great benefit for qualified veterans.
Jumbo loans are mortgages above the conventional loan limits (those insured by Fannie Mae and Freddie Mac). Because these larger loans are not backed in any way by the government, the rates on these loans are higher. We have Jumbo mortgage solutions for every level of Jumbo loan from just over the limit to the Super Jumbo size.
We offer First Time Home Buyer and State Bond programs that make home buying more affordable.