These are two of the most popular loan types for buying a home or refinancing your mortgage (including cash-out refinances). Both options are available for conventional conforming loan amounts, jumbo (non-conforming) loan amounts, and FHA or VA programs.
- Your interest rate and monthly principal and interest (P&I) payments remain the same for the life of your loan.
- Available in a variety of loan term options.
- You may be able to add extra features such as temporary buydowns.
- Predictable monthly P&I payments allow you to budget more easily.
- Protection from rising interest rates for the life of the loan, no matter how high interest rates go.
- May be a good choice if you plan to stay in your home for a long time.
- The overall interest you pay is higher on a longer-term loan than on a shorter-term loan.
- On a shorter-term loan, the monthly P&I payment is typically higher than on a longer-term loan.
- Your interest rate and monthly principal and interest (P&I) payments remain the same for an initial period of 5, 7, or 10 years, then adjust annually.
- Loans available in a variety of longer terms.
- Includes interest rate cap that set a limit on how high your interest rate can go.
- Typically ARMs have a lower initial interest rate than on a fixed-rate mortgage.
- The interest rate cap limits the maximum amount your P&I payment may increase at each interest rate adjustment and over the life of the loan.
- May provide flexibility if you expect future income growth or if you plan to move or refinance within a few years.
- Monthly principal and interest payments may increase when the interest rate adjusts.
- Your monthly principal and interest payments may change every year after the initial fixed period is over.
Talk to a local mortgage expert: Call (952) 928-5563 or email email@example.com
NOTE: Please see program specific pages for details or speak with your local mortgage consultant.
By refinancing an existing loan, your total finance charges may be higher over the life of the loan.