Refinance

What Type Of Mortgage Is Right For You?

Community banks offer 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.

  1. Your current financial picture.

  2. How you expect your finances to change.

  3. How long you intend to keep your house.

  4. How comfortable you are with your mortgage payment changing.

  • Here is a general description of the most common loan products.

    • 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) 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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