Fixed Rate Mortgages - If you are planning to live in the
home for 15, 20, 30 years or more, this may be the best program
for you. Your monthly payments are fixed over the life of
the loan, which means your interest rate and payment will
stay the same, even if the rates go up. You can also refinance
your home anytime you wish, if the rates drop below your
current fixed rate.
Adjustable Rate Mortgages - If you are planning to live
in the home 10 years or less, this may be the best program
for you. Adjustable Rate Mortgages (ARMís) offer
a floating interest rate equal to or less than the current
market rates. Your mortgage may start at 7.5% and float
to 6.250% if the market rates drop. However, rates may
increase which will make your monthly payment go up. No
one can predict when rates will go up or down, but over
the life of the loan, you can save money in interest and
payments and also by not having to pay closing costs each
time you lower your interest rate.
Balloon Mortgages - Balloon Mortgages offer a fixed lower
monthly payment for 5 or 7 years initially because the
payment is amortized over the life of the loan. At the
end of the balloon period, you must refinance at the current
interest rate or pay the loan in full, which is also known
as a ìfinal balloon payment.î This loan may
be best for you if you are planning to live in the home
7 years or less.
Home Equity Line of Credit - Lines of credit are much
like a credit card. If fact, some lenders issue credit
cards as a way to draw off of the line of credit. Initially,
you are issued availability to a certain amount of funds
based on the equity available in your home. Your payments
are based only on how much you borrow (take out) and what
the current interest rates are. Interest rates for equity
lines of credit are typically higher than mortgage rates,
but lower than credit card rates.
Home Equity Fixed Loan - These types of loans are better
know as a 2nd mortgage and typically have higher interest
rates than a 1st mortgage. You can borrow a lump sum of
money based on the available equity in your home. You will
receive the money all at once and have a fixed payment
over the life of the loan.
Home Improvement Loans - This type of loan provides you
with cash to repair your home. You will have to provide
an estimate of repairs from a certified contractor in order
to qualify for this type of loan. When the work is completed,
it will be inspected by the lender. Your appraisal will
be based on the proposed repairs when qualifying for the
loan.
Construction Loans - This type of loan provides funds
to contractors directly that is building your home. The
contractors initially get a lump sum and then submit invoices
regularly to the bank for payment throughout the building
process.
There are advantages and risks associated with any type
of loan. We strongly recommend speaking with one of our
qualified mortgage counselors before you apply with any
lender for your loan. |