A fixed rate mortgage has a constant interest rate that remains for the life of the loan. The biggest advantage of having a fixed rate is that the borrower does not have to worry that the rate will increase.
Interest rates change based on the business market on a daily bases. Feel free to give us a call and see what interest rates are available to you.
With an Adjustable Rate Mortgage (ARM), the interest rate may go up or down. Many ARM’s will start at a lower interest rate mortgage. This initial rate may stay the same for months or years. When this introductory period is over, your interest rate will change and the amount of your payment will likely go up.
Components of ARMs
- Index- referred to as the cost of money. Because of the market forces, the index fluctuates, during the term of the loan, causing the borrowers actual interest rate to increase and decrease
- Margin- referred to as a spread. Remain fixed or constant for the duration of the loan
- Rate Adjustment Period- the length of time between interest rate changes with ARMs
- Interest Rate Camp (if any)- limit the number of percentages points an interest rate can be increased during the term of a loan, helps to eliminate large fluctuations in the mortgage payments
- Interest Rate Floor- where the ARM begins. Is the period of time subject to the initial, start, or teaser interest rate
- Conversion Option (if any)- gives the borrower the right to convert from an adjustable rate loan to a fixed rate loan
Tips: Know How ARMs Adjusts
- How high your interest rate and month payments can go with each adjustment
- How frequently your interest rate will adjust
- How soon your payment could go up
- If there is a cap on how high your interest rate could go
- If there is a limit on how low your interest rate could go
- If your still able to afford the loan if the rate and payment goes up to the maximum allowed under the loan contract
Do not assume you’ll be able to sell your home or refinance your loan before the rate changes.
The value of your property could decline or your financial conditions could change. If you can’t afford the higher payments on today’s income, you may want to consider another loan.
Conventional mortgages are the most popular option for borrowers looking to purchase or refinance a home. Borrowers may choose between fixed and adjustable rate mortgage with terms from 10 to 30 years.
Conventional mortgages are not insured or guaranteed by any government agency and may be sold to Fannie Mae or Freddie Mac.
Many borrowers enjoy the consistent monthly payments that come with a fixed rate conventional loans, as this tends to make budgeting easier. However, Adjustable Rate Mortgage (ARMs) may make the initial payment lower with the payment adjusting after the fifth, or tenth year and every two years after for the term of the loan.
Why Get a Conventional Laon?
- Put down as little as 5%
- If you’re a first-time home buyer, you can put down as little as 3% for a fixed-rate loan
- Credit score as low as 620 May be acceptable
- Fixed rates offer consistent monthly payments and simplify planning and budgeting
- ARMs may have lower initial monthly payment than fixed-rate loan and adjust after the fixed term
- Available for purchase, refinance, or cash-out refinance
Federal Housing Administration (FHA)
A low down payment could open the door to your new home! Insured by the Federal Housing Administration, FHA loans are generally more flexible in credit, income, and down payment requirements making them a secure choice for borrowers who might not qualify for conventional loans.
Why get an FHA loan?
- Put down as little as 3.5% for a fixed-rate loan
- Credit score as low as 580 may be accepted
- Fixed and adjustable rates are available
- It’s possible to refinance to a conventional loan into an FHA loan
- FHA to FHA streamline refinances do not require an appraisal
- Available for cash-out refinance or rate and term refinance
- FHA-eligible down payment assistant programs allowed with Cardinal Financial Approved Programs
Veterans Affairs Loan (VA)
We proudly offer home financing to those who serve and have served our country. If you’re a veteran or an active duty servicemember, there’s no better mortgage product for you!. Guaranteed by the U.S. Department of Veterans Affairs, VA loans are specially designed with exclusive benefits-like flexible requirements and favorable terms for veterans, active duty servicemembers, and eligible surviving spouses. Available program include purchase and refinance options.
Why Get a VA loan?
- 0% down payment
- Credit scores as low as 580 may be acceptable
- Lowest interest rates available for qualifying borrowers
- No Monthly Private Mortgage Insurance (PMI)
- Available for purchase or cash-out refinance
- Streamline refinance (IRRRL) with no appraisal and minimum documentations (current VA loans only)
Are you buying a luxury home? Looking for a loan greater than the conventional loan limit? Jumbo loan make it possible for borrowers to purchase properties with low interest rate and loan amounts up to $3M. We offer a wide variety of Jumbo loan products, including fixed and adjustable rate mortgage. We also carry an interest-only option, which means your monthly payment is all interest and no principal. If you have a high credit score, low debt-to-income ratio, and sizable down payment, a Jumbo loan may be the best choice for you.
Why get a Jumbo loan?
- Put down as little as 10%
- Credit Scores as low as 660 may be accepted
- Loan Amounts up to $3M
- Low interest rate for qualifying borrowers
- Fixed rate, adjustable rate, and interest-only adjustable rate
- May be used for primary residence, second home, or investment property