The most common type of mortgage program where your monthly payments for interest and principal never change.  Property taxes and homeowners insurance may increase, but generally your monthly payments will be stable.  Fixed rate mortgages are available for 30 years, 25 years, 20 years, 15 years and even 10 years.

     Fixed rate fully amortizing loans have two distinct features.  First, the interest rate remains fixed for the life of the loan.  Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30 year mortgages.

     During the early amortization period, a large percentage of the monthly payment is used for paying the interest.  As the loan is paid down, more of the monthly payment is applied to principal.  A typical 30 year fixed rate mortgage takes 22.5 years of level payments to pay half of the original loan amount.

     These loans generally begin with an interest rate that is below a comparable fixed rate mortgage.  This may allow you to buy a more expensive home.

     Adjustable rate mortgage rates remain fixed for a specified period; typically 3, 5, or 7 years.  At the end of that period, the interest rate changes at specified intervals (generally each year) depending on changing market conditions.  If interest rates go up, your monthly mortgage payment will go up, too.  However, if rates go down, your mortgage payment will drop also.

     Ask us about these and other special kinds of mortgages that fit your specific financial situation.

     "Interest Only" products are an easy way to save money and a very popular alternative to traditional fixed rate mortgages, but they are not without risk.  An Interest Only loan can offer consumers greater purchasing power and increased cash flow.

     Typical Interest Only periods range from 5 to 15 years.  At the end of the interest only period, the loan payments rise to amortize the loan balance over the remaining life of the loan.  For example, on a 30 year loan with a 10 year interest only period, only interest is paid for the first 10 years.  Then, the full loan balance and interest is paid over the remaining 20 years.

     Most of these products allow you to pay towards principal if you so choose.

     Typical HELOC interest rates fluctuate with the PRIME rate, so your payments can change dramatically over time.  Many HELOCs require you to make minimum Interest Only payments for 5 or 10 years.  Once the Interest Only period ends, the outstanding balance is required to be paid over the remaining life of the loan.  If you sell your home, in most instances, you will be required to pay off the HELOC at that time.

     There are two typical kinds of second mortgages and both carry a fixed rate.

     The first is called a "30 due in 15".  It carries a balloon provision where your payments are based on a 30 year amortization schedule, but the full balance remaining after 15 years is due in one final balloon payment.

     The second type acts like a 15 year fixed rate mortgage.  Your payments are based on a 15 year schedule and the entire loan balance is paid by the end of the 15th year.  This program's payments will be higher than the "30 due in 15" option above.