When purchasing a home, getting a mortgage is often the most stressful part of the process, especially for first-time homebuyers. Today, there are many different types of mortgage products, all with their own advantages and disadvantages. As we have seen over the past couple of years, not understanding a mortgage home loan can lead a homeowner to make a decision that will negatively impact them for the rest of their lives.
So relax, take a deep breath, and let us help you decide what mortgage is best for you and help you find the best mortgage rate.
The table below, provides a basic overview of the some of the different types of mortgage products available.
| Mortgage Product | Description | Advantage / Disadvantage |
|---|---|---|
| Fixed Rate Conforming Mortgages | Mortgage amount under $417,000, apart from Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the limit is $625,500 | Advantage:
Disadvantages:
|
| Fixed Rate Jumbo Mortgages | Mortgage amount above $417,000, apart from Alaska, Hawaii, Guam, and the U.S. Virgin Islands, where the limit is $625,500 | Advantage:
Disadvantages:
|
| Hybrid Adjustable Rate Mortgages | Mix of fix rate and adjustable rate loans. The interest rate is fixed for the first few years of these loans--for example, for 5 years in a 5/1 ARM. |
Advantages:
Disadvantages:
|
| Interest Only ARMs | You pay the interest only for a fixed period of years, usually 3 to 10 years. After fixed period, payments will increase and may also adjust based on interest rate changes. |
Advantage:
Disadvantages:
|
| Payment Option ARMs |
An adjustable-rate mortgage that allows you to choose among
several payment options each month. These include:
|
Advantage:
Disadvantages:
|
| FHA Loans | A loan that is backed by the FHA, Federal Housing Administration. | Advantages:
Disadvantages:
|
Visit our Adjustable Rate Mortgages page to learn more about these types of loans.
Below are rates for purchase and refinance mortgages.