Understanding Your Mortgage Options
When choosing a mortgage, it's important to understand the different types available and how they can impact your monthly payments and long-term financial goals. Our mortgage calculator helps you explore various scenarios to find the best fit for your situation.
Common Mortgage Types
Fixed-Rate Mortgages offer stable monthly payments with interest rates that remain constant throughout the loan term. These are ideal for borrowers who prefer predictable payments and plan to stay in their home long-term.
Adjustable-Rate Mortgages (ARM) typically start with lower interest rates that can change over time based on market conditions. These may be suitable for borrowers who expect their income to increase or plan to move within a few years.
FHA Loans are government-backed mortgages that often require lower down payments and have more flexible credit requirements, making homeownership accessible to more borrowers.
Key Factors to Consider
Your down payment amount significantly affects your monthly payment and whether you'll need private mortgage insurance (PMI). Generally, a down payment of 20% or more helps you avoid PMI and reduces your monthly costs.
The loan term you choose impacts both your monthly payment and total interest paid. While 30-year mortgages offer lower monthly payments, 15-year loans typically have lower interest rates and help you build equity faster.
Remember to factor in additional costs like property taxes, homeowners insurance, HOA fees, and maintenance when budgeting for homeownership. These expenses aren't included in your mortgage payment but are essential parts of your housing budget.