Types of Home Loans

Whether you’re looking to purchase a home or refinance an existing home loan, you’ll probably come across 3 basic types of home loans:

• Fixed Rate Mortgages
• Adjustable Rate Mortgages (ARMs)
• Combination Rate Mortgages (also known as hybrid loans or fixed-period ARMs)

Each loan has its own advantages. Read on for more information about home loans.

Fixed Rate Mortgage

• Fixed rate mortgages usually have a 15 or 30 year loan term.
• The interest rate and monthly payments remain the same throughout the entire loan term.
• Typically have slightly higher interest rates than adjustable rate loans.

The higher interest rate means you’ll make higher monthly payments.

• You may need to make a bigger down payment in order to get approved for a fixed rate loan.

Learn more about reasons why fixed rate mortgages may be right for you…

Adjustable Rate Mortgage (ARMs)

• Adjustable Rate Mortgages typically feature a 15 or 30 year loan term.
• The interest rate is variable, so it can increase or decrease.
• As the interest rate changes, monthly mortgage payments will also change – increasing or decreasing depending on the rate.

Find out if an adjustable rate mortgages may be right for you.

Combination Rate Mortgage

• Combination rate mortgages feature elements of both fixed and adjustable interest rate loans.
• Sometimes referred to as hybrid loans or fixed period ARMs.
• During the fixed rate period – typically at the beginning of the loan - the interest rate is fixed. During the fixed period, your monthly payment remains the same.
• After the fixed period ends, the loan becomes an adjustable rate mortgage. Your monthly payment can change depending on interest rate fluctuations.

Combination rate mortgages are another popular alternative to traditional fixed rate home loans. Find out if a combination rate mortgage is a good alternative for you.

Still confused about the mysteries of home loans? Let us help you. Call our home loan experts at 1-888-284-7596 for a FREE, no obligation consultation. And don’t worry, there’s absolutely no commitment needed. Call now!