TITLE: Mortgage Options
There are a couple of different mortgage options to consider. If you are a first-time homebuyer, we want to make sure you are aware of your options. If you have questions regarding any of them, we are here to answer!
Mortgage types are specific to your lifestyle and your financial situation. Some of you may plan on making a twenty percent down payment and some of you may be seeking some type of financial assistance. When deciding on your mortgage option, you also want to keep in mind how long you plan on living in the home.
Fixed-Rate Mortgage
The interest rate on a fixed-rate mortgage remains the same for the life of your loan. The life of your loan can be from ten to thirty years. If you plan on staying in the home for a long period of time, this type of mortgage would be for you. Not only do you have security in your interest rate, but you also have security in your monthly payment.
Adjustable-Rate Mortgage
The interest rate on an adjustable-rate mortgage adjusts from time to time based on an index. If you do not plan to be in the home for an extended period of time, this type of mortgage may be for you. At each adjustment period, your interest rate and monthly payment will change. Some adjustment periods do not begin until the fifth year of your mortgage; so if you plan on selling your home before that time, this mortgage is for you. Adjustable-rate mortgages have not only a low starting interest rate, but also lower monthly payments for the initial term.
If you need help with any costs that occur at the start of your mortgage, take a look into Down Payment Assistance Loans. There are some state programs that are available to assist residents who need financial assistance. This may be in the form of a loan or grant and may assist with the down payment or closing costs.