Loan Variables
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Many clients find themselves asking . . . "What choices or available options will affect my loan?

Mortgage Term:
Mortgages are typically available at 15, 20, or 30-year terms.  The shorter the term, the higher the monthly payment, all other variables equal.  It's important to keep in mind that you will pay more in interest overall if you borrow for a longer term.


Fixed vs. Adjustable Interest Rates:
A fixed rate locks in a rate for as long as you hold the mortgage.  This is usually a good choice if interest rates are low.

An adjustable-rate mortgage (ARM) is designed so that your mortgage's interest rate will rise/fall as interest rates increase/decrease.  ARMs usually offer a lower rate in the first years of the mortgage. ARMs typically have a limit as to how much the interest rate can be increased and how frequently they can be raised. ARMs are a usually a good choice when interest rates are high or when you expect your income to grow significantly in the future.  ARMs expose investors to the ever-changing market and should be used with caution.


Balloon mortgages:
Balloon mortgages offer very low interest rates for a short period of time - typically between 3 - 7 years.  Payments usually cover the interest only, therefore the principal owed is not reduced.  A balloon mortgage may be a good choice if you plan on selling your home in the short-term.


Government-backed loans:
Government-backed loans, sponsored by federal agencies such as the U.S. Department of Veterans Affairs (www.va.gov), offer special terms, (i.e. lower down payments, reduced interest rates, etc.) to qualified buyers.