Getting the right mortgage is a must. By having the right mortgage for your financial situation and with the right terms, you aren’t taking any risks with your home. However, having the wrong type of mortgage or terms can cause you to leave thousands of dollars on the table.
But with so many mortgage options available – adjustable-rate, fixed-rate, balloon and reverse mortgages – how do you know which is best for you? Putnam Bank is here to help relieve any confusion with our guide to your mortgage options. These are general outlines of common mortgage types, so be sure to contact a Putnam Bank lender for more specific information.
Adjustable-Rate Mortgages, also known as ARMs.
- Interest rate: varies based on market conditions. ARMs come with change caps and lifetime rate caps to prevent huge jumps in mortgage payments.
- Ideal for: those who are only going to be in a home for a few years.
- Benefits: allows you to take advantage of periods of low interest rates.
- Drawbacks: mortgage and interest payment can change each month, making it hard to budget for.
- Interest rate: locked in for the life of the loans (most common terms are 15 and 30 years)
- Ideal for: those who will be living in their homes for a long period of time.
- Benefits: simple to understand, and the fixed monthly payments are easy to budget for.
- Drawbacks: may be too expensive if you purchase your home in a time of high interest rates.
- Interest rate: fixed or adjustable
- Ideal for: homeowners age 62 or older looking to supplemental their retirement income.
- Benefits: you receive payments instead of making them, and there are no limitations on the way you use the cash.
- Drawbacks: loan balance must be repaid if the borrower moves, dies or does not live in the home for 12 consecutive months, and often falls upon the spouse or children of the borrower.
Knowing the various mortgages options available is the first step in getting the right financing for your needs and financial situation. The mortgage lenders at Putnam Bank listen to your needs and will help you find the best mortgage solution available. We look forward to hearing from you soon!
Putnam Bank, Equal Housing Lender and Member FDIC