Types of Mortgages
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If you prefer regular payments with no surprises, are planning to stay in your home a long time or are buying a home at a time when interest rates are comparatively low, a fixed rate loan may be a good option for you. This loan type has interest rates that stay the same for the life of the loan. This means your principal and interest payments will not change, even if interest rates rise.
If you plan to move, refinance or pay off your mortgage within 10 years, consider an Adjustable Rate Mortgage (ARM). An ARM offers a low initial rate and monthly payment, allowing you to save, invest or direct funds toward other bills. Rates can be fixed for a specified number of years and will adjust annually based on the 12-month U.S. Treasury bill.
Reduced Term Mortgage
If you want to pay off your home in a shorter timeframe, a Reduced Term Mortgage is a great choice. Refinance at a low, fixed rate with no processing fee and reduced closing costs. You choose the term – 1 to 10 years – that best meets your personal goals. Whether planning for retirement or sending a child off to college, you can own your home faster and save money along the way.
When you know your financial situation will improve in the coming years, an Interest-Only loan may help make your dream home yours. An Interest-Only loan lets you pay only the interest, taxes and insurance in the beginning years of your home loan, which means lower monthly payments. Plus, an Interest-Only loan may help you qualify for a larger loan amount.
A Piggyback loan is designed to help you avoid paying private mortgage insurance (PMI) when the down payment for your perfect home is less than 20% of the purchase price. This loan type is set up so that you finance up to 80% of the purchase price with a first home loan, and then finance the remaining amount (less your down payment) with a second home loan.