Let’s take the stress out of financing your home! Whether you are buying your first home, moving up or downsizing, knowledge is power. By learning more about the vast collection of home mortgage programs and financing options, the stress just melts away. That way you can plan for your future and find your dream home.
A fixed- rate mortgage is the most common type of mortgage. Typically, you choose between two different plans. There is the 30 year and the 15 year, and both types you will experience easier budgeting because of the predictable monthly payments. If you choose the 15 year fixed-rate mortgage, your payments will be higher but the idea is to pay your house off in 15 years. The same thing goes for a 30 year fixed-rate mortgage, only the payments will be lower since you have double the time to pay it off. Either way, you will relax knowing you will never have to worry about rising interest rates for the life of your loan.
With an Adjustable-Rate Mortgage (ARM) you can expect lower interest rates in the early years of your mortgage program, compared to a fixed-rate loan, with means more cash on hand each month. However, the interest rate fluctuates with the ever changing home market so ARM rates and payments may increase over time.
Interest-Only Jumbo Loan
For affluent homebuyers with irregular incomes, the interest-only mortgage jumbo loan, as its name implies, allows the option of paying the interest for the first few years of the loan. Today, interest-only mortgages are mostly jumbo loans. In the country’s highest-cost housing markets, a jumbo loan is a mortgage for more than $625,500. Interest-only loans are structured like and adjustable-rate mortgage. The interest-only period lasts for the first 5, 7, or 10 years. After that, the rate typically adjusts annually, and the borrower pays principal, as well as interest. When it reset, your payments can go up pretty significantly, even if the interest rate doesn’t change that much.
Let Us Help
These are the main 3 mortgage programs, and no matter what kind of loan gets you into a home, be sure to do your homework beforehand and makes sure there are no details about the mortgage program you don’t understand. Our S&D Real Estate Agents are here to help advise you as to which mortgage program and financing options would best fit you and your family.