Home Loans
Fixed Rate Loan
Fixed-Rate loans are the most popular type of mortgage loan because the loan is based on an interest rate and a monthly Principle and Interest payment that do not change over time. Property taxes and insurance costs may fluctuate, but many borrowers find fixed-rate home loans to be the best mortgage for their needs because they can create a budget and rely on a steady payment. Fixed-rate mortgages are offered on all Conventional, FHA loans, VA, and Jumbo loan products.
Most mortgage companies offer fixed-rate options with 15 or 30-year terms, but you can also explore alternatives like 10 or 20-year terms. The longer the term, the higher the interest rate will be. The longer term, however, generally creates a lower payment because the payback is spread out over more years.
*Please visit our Disclosures page for more details for all loan types
Adjustable-Rate Loans
An adjustable-rate mortgage differs from a fixed-rate mortgage in a lot of ways. Most importantly, with a fixed-rate mortgage, the interest rate remains the same during the life of the loan. With an ARM, the rate changes periodically, usually in relation to a financial index, and the payments can go up or down depending on how the index performs.
All ARM’s have some common features. Basically, they are the adjustment period, the index, the margin, the note rate, the initial rate, interest rate caps, and payment caps.
Payments are calculated by adding the margin set by the mortgage lender to the particular index. Some common indices utilized include:
- Cost of Funds Index
- Treasury Bills
- LIBOR