Types of Loans

Fixed Rate Mortgages are the most popular loans for borrowers who plan to own the property for a long time. A fixed interest rate means the interest rate does not change so the interest rate does not go up or down. Fixed rate loans offer long term payment stability.

Loan Term is most often 30 years but there can be substantial savings from selecting a shorter term. We offer loans terms as low as 10 years with 15-year, 20-year and 25-year loans also possible. There are a few things to consider when thinking about loans with a shorter term. First, a shorter term means a slightly higher monthly payment. Second because a loan with a shorter term pays off faster, the total finance charge paid over the life of the loan is often much lower.

Adjustable Rate Mortgages (ARM) are available in several types. The benefit of a home loan with a rate that can change is that the initial interest and monthly payment is usually lower. Some adjustable rate loans have an initial interest rate that is fixed for 3, 5, 7 or 10 years. Sometimes called Hybrid ARMS, these are also referred to as 5/1 or 7/1 ARMS because the initial rate and monthly payment is fixed for five or seven years. After the initial fixed period the rate changes annually or as specified in the loan documents. ARM’s can be a good choice for people who expect to move, refinance or sell the property before or shortly after the rate adjustment is scheduled.