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CHOOSING YOUR PERFECT HOME LOAN.
Just as there’s home style to suit every lifestyle, there are numerous mortgage options available today to meet a variety of needs and situations.
Which home loan is the best choice for you?
FIXED RATE HOME LOANS.
Fixed rate loans offer one primary advantage: predictable housing cost for the life of the loan. The most common is the 30-year fixed rate home loan.This choice offers the lowest monthly payments, while providing a never-changing monthly payment schedule. Some lenders offer 15, 20 and 25-year term home loans as well. The longer the term of the loan, the more total interest you will pay.
ADJUSTABLE RATE LOANS (ARM).
With an ARM, the initial interest rate is typically one to three percentage points lower than that of fixed rate home loans, making ARMs easer to qualify for. However, payments and interest rates can increase, either steadily or irregularly, so homebuyers need to have the income to keep up with all possible rate and/or payment changes. Interest rate caps and monthly payments caps are consumer safeguards found on some ARMs.
An interest-only loan does not mean you will never pay principal on a home loan. Typically, your interest-only payments will last for a specified term (for example, 5 years). During that time, your only obligation is to make interest payments, and no principal. After that period, the unpaid balance of the loan fully amortized over the remaining term and you are then obligated to make principal and interest payments to the lender.
REVERSE ANNUITY MORTGAGES (RAM).
For older citizens, especially those on fixed incomes, the equity in their homes represents a large but liquid asset. The RAM was designed to help supplement those homeowners’ income by paying them an annuity, usually every month, up to an amount equal to the equity they have in the home. The home owner retains ownership and the loan is based on a percentage of the home’s current value.
The Federal Housing Administration and the Veterans Administration offer fixed rate home loans and ARMs, with loans that feature low or no down payment terms. VA loan are restricted to individuals qualified by military service or other entitlements, but FHA-insured loans are open to all qualified home purchasers who intent to occupy property.
Talk with your lender or one of ours to find the right type of home loan for you.