With all the loan programs avaliable today there are a number of factors to determine to find the right loan program for you. A couple of the most important are:
This is the best choice if you’re looking for a consistent long-term, stable loan. Fixed-Rate Mortgage means that the payment (principal & interest) will remain constant and throughout the entire life of the loan. Regardless if interest rates go up or go down your payment will remain the same. However if rates do go down you can usually refinance into that lower rate.
Fixed-Rate Mortgages are from 15 year to 40 years in length and the only thing different is the term (length) of the loan. The shorter the term equals a higher payment but also will cost you less in the total amount of interest that you will pay over the life of the loan.
Here is a chart to help you consider the term of loan that may fit you best.
|Length of Time to Keep Property||Loan Types to Consider|
|10 or more years||15, 20, 30, or 40 year fixed-rate|
|From 7 to 10 years||15, 20, 30 or 40 year fixed-rate,
or 10/1 ARM
|From 3 to 7 years||5/1 or 7/1 ARM|
|From 1 to 3 Years||6 month ARM, 1 year ARM, 3/1 ARM|
An adjustable-rate mortgage (ARM) means that the interest rate changes over the life of the loan — according to the terms specified in advance.
With an ARM:
These are types of loans that the lender is not requiring you to provide the traditional type of paperwork for. With these types of loans you will need to have a much higher credit score to qualify for and the lenders will charge a higher interest rate and or extra fees to obtain the loan.
10/1, 7/1, 5/1, 3/1
The first number represents the years that the loan has a Fixed-Rate and then the interest rate will adjust to the Index that it is tied to.
With an interest-only mortgage loan, you pay only the interest on the mortgage in monthly payments for a fixed term. After the end of that term, you refinance, pay the balance in a lump sum, or start paying off the principal, in which case the payments jump skyward.
3/1 – 5/1 – 7/1 – 10/1
The first number represents the years that Interest-Only will be paid on the loan.
You have the option of paying down principal whenever you want.
This type of mortgage allows you to maximize your buying power and buy a higher priced home than a traditional 30 year Fixed-Rate Mortgage would. But it also comes with more market risk also!
We are located in San Antonio, Texas and are Licensed Mortgage Broker and a VA Approved lender and have been specializing in VA Loans throughout Texas since 2002.
We can help you accomplish your home purchase or home refinance with expert service, fast closing and very low fees.
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If you are in the Dallas–Fort Worth–Arlington, TX metroplex area please see our new Grove Mortgage home loans in Dallas page.