Terms & Rates
Choosing a loan is an important step in the homebuying process. Here are a few things to consider.
Term Length
Mortgage loans vary in length, typically from 10 to 30 years.
Things to consider:
The duration of the loan will impact your monthly payment. For example, the shorter the loan term, the more you’re likely to pay each month. As you explore options, think about your down payment, your monthly budget and plan accordingly.
Types of interest rates
A fixed-rate mortgage offers a consistent interest rate for as long as you have the loan, instead of a rate that adjusts or floats with the market. A consistent interest rate usually means you’ll have a consistent mortgage payment too.
Things to consider:
While fixed-rate loans offer a steady mortgage payment, they typically have a higher interest rate. As you weigh your options, you may want to ask yourself, “Is this my forever home, or just a place where I’ll live for a few years?” That may help you determine if a fixed-rate loan is right for you.
Adjustable-rate mortgage (ARM)
An ARM loan has an interest rate that stays the same for a set period of time, then changes to a variable rate that adjusts every year.
Things to consider:
While you’ll likely pay a lower interest rate during the introductory period, your payment could increase quite a bit once this period ends—possibly hundreds of dollars a month. Rate caps limit the amount your interest rate can rise, but make sure you know what your maximum payment could be.
Results of the mortgage affordability estimate/prequalification are guidelines; the estimate isn’t an application for credit and results don’t guarantee loan approval or denial.
All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply…
Home lending products offered by partnership banks and lenders.