Understanding Mortgages
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Pros and Cons of the Different Loan Types
15 Year Fixed Rate
Pros
- Lower interest rate
- Lower amount to pay back
- Home paid off in only 15 years
Cons
- Higher monthly payment
30 Year Fixed Rate
Pros
- Lower monthly payment
Cons
- Higher interest rate
- In debt for 15 more years
- Higher amount to pay back
5 Year Adjustable Rate
Pros
- Lower monthly payment for the first five years
- Perfect if your living situation isn’t permanent
Cons
- Monthly payments after first 5 years will be unpredictable (no fixed interest rate)
Frequently Asked Questions
Learn the mortgage basics
What is Home Refinancing?
Refinancing is the act of getting a new mortgage to replace the original one, usually done to obtain a better interest rate and term.
Why should you refinance your home?
Refinancing can be a great way to get a lower interest rate to lower your monthly payment or pay less over the life of the loan.
What is a home loan?
Known as a mortgage, a home loan is a loan that is secured by property or real estate. In giving the loan, the lender is promised that the buyer will pay back the amount borrowed within a particular timeframe and owns the property until it is completely paid off.
What are different types of home loans?
Home loans can come in a few varieties, but the most common are a fixed-rate loan and an adjustable rate loan. Other types include an FHA loan, VA loan, USDA loan or a Bridge loan
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