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| Mortgage FAQs |
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What types of mortgages are available?
- Fixed-rate mortgage. You pay the same interest rate and same monthly payment of principal and interest for the duration of the mortgage. The most common are 30, 20 and 15 years. Fixed-rate mortgages are best if you plan on being in your home for a while.
- Adjustable-rate mortgage (ARM). The interest rate stays fixed for an initial interest rate period, which ranges from 1 to 7 years. Then the rate will adjust up or down annually for the life of the loan based on a specified index. An ARM is a good option if you believe interest rates will go down over the next few years or if you plan on staying in your home 5 to 7 years or less.
- Combination loan. A loan where you receive a first mortgage combined at the same time with a second mortgage. This option may help you avoid the costs of private mortgage insurance (PMI) and/or the higher rate of a jumbo loan with as little as 10% down. The most popular combinations are 80-10-10 (80% first, 10% second, 10%down), 75-15-10 (75% first, 15% second, 10% down).
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