With a 15-year fixed loan, your payments will be kept the same and your loan will be completely paid off after 15 years. But, this loan will have higher monthly payments compared to the 30-year fixed loan. The trade off? You are paying your loan off in a shorter timeframe. Because of this, a 15-year fixed loan will allow you to build equity more quickly, but the high payments may limit the homes you can afford. Unlike the 30 or 15-year fixed loan, an adjustable rate mortgage may be a better option for those who are planning to sell their homes in a certain time frame. 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. Alternatively, there are other loan options you may be qualified for.
If you are a United States veteran, 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. FHA Loans. FHA loans are designed for low to moderate income borrowers. Allowing lower credit scores and a minimum 3.5% down payment, this loan program offers flexibility. Unlike the previous loans, FHA loans are flexible and allow families to qualify for a loan that they otherwise might not have been able to attain. Finally, there is a USDA loan. A United States Department of Agriculture 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. Are you interested in discussing your mortgage options today? For more information on the different loan options and how to get a mortgage started with Home Point Financial, Please visit: www.homepointfinancial.com/contact