Fort Sill Federal Credit Union Home Buying Guide
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Numerous options and programs exist with different terms, features and benefi ts to suit various buyers. Be a well-informed consumer by familiarizing yourself with these common mortgage types: WHEN IT COMES TO MORTGAGES, ONE SIZE DOES NOT FIT ALL. Co nve nt i o n a l/F i xe d - Rate M o r tg a g e : A fi xed-rate mortgage features an interest rate that remains constant throughout the term of the loan. Most fi xed-rate mortgages come with a term of either 15 or 30 years. Ad j u s t a b l e - Rate M o r tg a g e (A R M) : Adjustable-rate mortgages typically start with a lower rate than fi xed-rate mortgages, but a er a few years the rate can begin to rise and will fl uctuate periodically. VA (Vete r a n s A a i r s) L o a n s : VA loans off er up to 100% fi nancing for military members and their families. F H A (Fe d e r a l H o u s i n g Ad m i n i s t r at i o n) L o a n s : FHA loans can help buyers receive fi nancing even if they may not otherwise qualify for a mortgage. The FHA insures the lender for the mortgage amount – removing the risk associated with the borrower. US DA (U n ite d St ate s D e p a r t m e nt o Ag r i c u ltu r e) R u r a l D eve l o p m e nt L o a n s : These loans are available to rural residents who meet certain requirements, including the inability to be approved for traditional fi nancing. B a ll o o n L o a n s : A balloon loan is a mortgage in which a larger-than-normal outstanding balance must be paid at the end of the term. I nte r e s t- O n l y L o a n s : These loans off er borrowers a period of time when they pay interest only on their mortgage. (During the interest-only term, the borrower does not build any equity.) Once the interest-only term ends, the borrower starts to pay off the principal as well. Selecting the mortgage option that works best for you will depend on a number of factors, including how long you plan to stay in the home, if you're comfortable not knowing what your future payments might be and more. Work with your loan offi cer or mortgage broker to discuss your goals and lifestyle in relation to these diff erent financing options. By carefully analyzing the pros and cons of each loan type, you can determine a financing option that best meets your needs.