Buying A Home

Mortgage Basics: What Type Of Mortgage Is Right For You?

Home America offers several types of mortgages to suit your various needs. As a general rule, you should take these factors into consideration when selecting a mortgage program.

• Your current financial picture.

• How you expect your finances to change.

• How long you intend to keep your house.

• How comfortable you are with your mortgage payment changing.

Click here for a general description of available loans.

• Adjustable Rate Mortgages (ARMs).
  Searching for the lowest rates? An ARM may be your answer. However, the interest rate will change periodically, sometimes as soon as 6 months into your loan. Make sure to research the limit, or ‘cap,’ on how high your ARM can adjust. Long-term ARMs (5+ years) may be good choice if you have a fixed or declining income, and short-term ARMs (3 years or less) if your income is increasing.

• Fixed-Rate Mortgages.
  Planning on living in your house for more than 5 years and want the lowest monthly payment? A fixed-rate mortgage might be your solution. A 15-year fixed rated mortgage will allow you to amass your equity more quickly than a 30-year fixed-rate mortgage but will produce higher payments.

• Balloon Mortgages.
  Planning on living in your house fewer than 5 years? A balloon mortgage might make good sense for you. It will allow you to pay shorter payments for a certain amount of time and one large payment for the remainder of the loan after a specified number of years.

• FHA/VA Mortgages.
  Are you a single parent or unable to afford a down payment? You may want to consider a FHA/VA loan. Once you get pre-approved, ask your community bank about these loan types. Click here to learn more about low payment programs more generally (link to lowdownpayment.html) or here begin this process (link to application).

• Jumbo Mortgages.
  Do you need to borrow a higher loan amount? Jumbo loans will allow you to borrow more than $200,000, but typically carry a higher interest rate.

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