Fixed Rate Mortgages (FRM) The most common type of loan option, the traditional fixed-rate mortgage includes monthly principal and interest payments which never change during the loan’s lifetime. Terms can be amortized over periods of 30, 20, 15 or 10 years.
Adjustable-Rate mortgages include interest payments which shift during the loans term, depending on current market conditions. Typically, these loans carry a fixed-interest rate for a set period of time before adjusting and will be amortized over a 360 month period.
FHA home loans are mortgages which are insured by the Federal Housing Administration (FHA), allowing borrowers to get low mortgage rates with a minimal down payment. Fixed rate terms of 30 or 15 years are available.
VA Loans VA loans are mortgages guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and no down payment requirement. This program was designed to help military veterans realize the American dream of home ownership. Fixed rate terms of 30 or 15 years are available.
Components of an ARM Prior to choosing a home loan, you should know the advantages and risks of adjustable-rate mortgages to make an informed, prudent decision.
Should you get a fixed-rate or adjustable rate mortgage? A conventional loan or a government loan? Deciding which mortgage product is best for you will depend largely on your unique circumstances, and there is no one correct answer.