When it comes to financing a home, there are many options to consider. Working closely with a loan officer will help determine what type of mortgage is right for you. First, we will cover some of the basics of mortgage loans so you have a better understanding when you contact a professional.
Mortgage Term: Mortgages come in a variety of different time periods, as little as 5 years all the way to 30 years. The length of term you choose will depend upon how long you plan on living in the home as well as how much you can afford per month. Generally, the longer the term of your mortgage, the lower the monthly payment will be.
Fixed or Adjustable Rate: The next factor you will need to decide on is whether you want your interest rate to remain the same throughout the life of the loan or if you will choose an adjustable rate. Fixed rate loans are a safer option with your payments remaining the same regardless of the market, but are also more expensive. Adjustable rate mortgages start off with a fixed rate for an initial period, for instance a 5/1 ARM is fixed for the first five years and after that five years period your initial interest rate will adjust based on the market. Adjustable rate mortgages typically offer a lower interest rate in the beginning.
Mortgage Product: Once you know the type of interest rate and the length of your mortgage loan that will work best for you, you will then work with your loan officer to find a loan program that will best suit your needs. Some of your options include Government backed loans such as FHA or VA, conventional loans, backed by Fannie Mae, local programs through the IHDA, or even specialty loans for renovations, new construction, condominiums, etc.
Whatever type of financing you need, 1st Advantage Mortgage will help you find a solution. Contact me today to discuss your mortgage options.