sellboji

What Are My Loan Options?

Fixed-rate mortgages

 

With a fixed-rate mortgage, your interest rate – and your monthly payment of principal and interest – will stay the same for the entire term of the loan. This type of mortgage tends to be the most popular because it protects homeowners from the possibility of future monthly payment increases (a situation faced by borrowers who select an adjustable-rate mortgage) and is very straightforward.

Fixed-period Adjustable-Rate Mortgage (ARM) or hybrid ARM

 

Most lenders today offer a fixed-period or "hybrid” ARM, which is an adjustable-rate mortgage featuring an initial fixed interest rate period, typically of 3, 5, 7, or 10 years. After the fixed-rate period expires, the interest rate becomes adjustable for the remainder of the loan term. Fixed-period ARMs are often named by the length of time the interest rate remains fixed.

Example: In a 5/1 ARM, the “5” stands for the five-year introductory period during which the interest rate remains fixed. The “1” indicates that the interest rate is subject to adjustment once per year after the introductory period, and for the remainder of the loan term.

Government loans (FHA and VA)

 

If you're qualified, you may consider an FHA (Federal Housing Administration) or a VA (Department of Veterans Affairs) loan. These programs allow a lower down payment and credit score when compared to conventional loans.

FHA loans

 

FHA loans are helpful for applicants who don't have a 20% down payment saved or who need more flexible income or credit requirements.

There are some differences between FHA loans and conventional loans. For example, there's a maximum loan amount, which varies depending on where the home is located.

Also, FHA loan programs typically require you to pay mortgage insurance, similar to private mortgage insurance, or PMI. Under FHA, this is called a “mortgage insurance premium,” or MIP. Typically, you will pay an upfront mortgage insurance premium (UFMIP). Keep in mind that the UFMIP must be entirely financed into the mortgage or paid in cash; it cannot be partially financed. You will also pay an annual insurance premium, which you will pay monthly with your mortgage payment. You’ll need to factor that amount in when you set your budget.

VA loans

 

VA loans are offered by VA-approved lenders and are insured by the Department of Veterans Affairs. To qualify, you must be a current or former member of the U.S. armed forces or the current or surviving spouse of one. These loans can help reduce your down payment requirement, sometimes to zero. They may also help you get a lower interest rate on your loan. However, there are limits on the available loan amount. If you believe you may qualify for a VA loan, be sure to tell your lender, so you can explore your options together.

Jumbo loans

 

When you start to explore your mortgage options, you may hear the term "jumbo loan" come up. If you do, this may be because you live in a high-priced real estate market or are looking at properties that are more expensive than average. If you are considering homes requiring a mortgage that exceeds $417,000, it's a good idea to find out more about jumbo loans and discuss them with your lender.

Get In Touch

Local Expert Updates

Matt Lippon Broker Associate (Real Estate Agent)

Matt Lippon

Broker Associate

712.330.0604

712.336.4967

Aaron Jones RE/MAX Hall of Fame (Real Estate Agent)

Aaron Jones

RE/MAX Hall of Fame

712.320.9442

712.336.4967

Community Updates

Brooke Stecker Team Evans and Stecker (Real Estate Agent)

Brooke Stecker

Team Evans and Stecker

 641.420.2172

 brooke@sellboji.com

The Gardens

Arnolds Park

Great food, fantastic lake views, and amazing service. The Gardens has it all. Stop in and have a cold beverage on the deck and listen to some of the best live music in the area. Located in the

More Info
Matt Lippon Broker Associate (Real Estate Agent)

Matt Lippon

Broker Associate

 712.330.0604

 matt@okobojipropertygroup.com

Ace Hardware

Spirit Lake

3401 Berquist Ave Spirit Lake, IA 51360 Local hardware store in Spirit Lake owned by Gary & Peggy Fick & Cynthia Fick. The selection and the service are excellent at Ace Hardware, if you have a

More Info
Greg Sheeler Real Estate Professional (Real Estate Agent)

Greg Sheeler

Real Estate Professional

 712.330.1573

 greg@okobojipropertygroup.com

Silver Lake

Lake Park

Silver Lake in Lake Park is a 1,000 acre lake with an average depth of about 6.5ft and a maximum depth of about 10ft. Silver Lake offers some of the best walleye fishing in the IGL's, especially in

More Info

Subscribe To Our Newsletter

The newsletter is sent periodically and will updated you on the latest real estate news and offers.

Your browser is out-of-date!

Update your browser to view this website correctly.

Update my browser now

×