When you’re thinking about purchasing a home, you should shop for a mortgage that fits your lifestyle and financial situation. Consequently, there are certain factors that need to be considered when you’re trying to find one that is appropriate for your needs and circumstances. When it comes to purchasing a home, no two buyers are alike. For instance, some buyers have no problem paying 20% down. Conversely, others may need financial assistance in order to come up with their down payment.
The amount of time that you plan on keeping your home will play a significant role in the type of mortgage you choose. Here are 3 mortgage loan options to consider based on your current finances and lifestyle:
Adjustable-rate mortgage (ARM) – with this type of mortgage, you’ll see periodic interest rate adjustments that are based on the current index. These mortgages are the best option for individuals or families who plan on keeping a home for a few years and then purchasing a newer home to move into. With an ARM, your interest rate as well as your monthly payment could change with each adjustment period. The key advantages of an adjustable-rate mortgage are a lower interest rate in the beginning and a smaller monthly payment during the first term of the loan.
Down Payment Assistance (DPA) Loan – as the name implies, this type of loan is ideal for those individuals or families that need financial assistance with their down payment and other up-front fees. You can contact one of several Housing Finance Agencies and inquire about the different state-specific financial assistance programs that are available to home buyers. There are several grant and loan programs, as well as financial assistance for closing costs, down payments, and student debt relief. The key advantages of DPA loans are lower up-front payments are required and you have several financial assistance programs available to most home buyers.
Fixed-rate mortgage – another popular mortgage option is the fixed-rate mortgage. This particular mortgage features an interest rate that never changes during the entire term of the loan. For mortgages with terms of 10 to 30 years, this means that you’ll have peace of mind knowing that your interest rate and monthly payment will be the same for the duration of the loan. Fixed-rate mortgages are an ideal option for those individuals and families who plan on living in their home for many years and even up to or past the term of their mortgage. The key advantages of fixed-rate mortgages are interest rate security and a stable, unchanging monthly loan payment.
For additional information regarding these different mortgage loan options or to discuss your specific home buying needs, please contact First Savings Bank Louisville at (502) 238-9655 your earliest convenience.