Consumer Guide: Mortgages and Financing
Buying a home is one of the largest personal and financial decisions you can make. For many buyers, the process includes finding a loan that will help them pay for a new home over time.
What is a mortgage and how do I get one? A mortgage is a loan offered by a bank or a lender that lets you borrow money to purchase a home and repay overtime with interest. Mortgages can take many forms but one of the most popular options is a 30 year fixed rate mortgage. Many factors can affect the mortgage options available to you including your down payment personal finances for example credit score income existing debt employment history and other factors like government policies current interest rates and what lender you're working with.
What types of loans are there? Factors like where you are searching for a home and how long you plan to stay in your new home will help determine which loan type suits you, some options include.
Fixed Rate Mortgage - which sets an interest rate and monthly payment for the life of the loan which is typically 15 or or 30 years
Adjustable Rate Mortgage (ARMs) - ARMs may offer interest rates that are lower than you could get with fixed rate mortgage for a chunk of the life of the loan such as 5 or 10 years however, after that point your interest rates are subject to change approximately once per year based on market conditions.
“Buying your first home doesn’t mean it’s going to be your forever home but it’s a starting point ”