Types of Mortgages:

In general, there are two types of mortgages to borrowers. Knowing your financial background, credit score, and your tolerance (or lack of tolerance) for fluctuations in payments over the life of the loan will help you decide which type of mortgage to explore with our loan officers.

Adjustable Rate Mortgages (ARMs):

All adjustable rate mortgages have one thing in common: They have a rate of interest that is indexed to changes in market rates and adjusts as the chosen index rises or falls. But that's where the similarity ends. If you and your family can tolerate some changes in payments, you may benefit from exploring these mortgages more closely.

To learn about the elements that vary from ARM to ARM, read about ARM Features. Then take a look at the types of ARMs we offer.

Fixed Rate Mortgages:

With a fixed rate mortgage, your interest rate—and consequently your monthly principal and interest payment—remains fixed over the life of the loan. This makes fixed rate mortgages very budget-friendly, since you can count on your monthly principal and interest payment remaining the same for years to come.

But don't forget: If your monthly payment includes property taxes and insurance, increases in these amounts will obviously affect your monthly payment. Fixed rate mortgages typically offer a choice of term, from 30 years to as few as 10 years.

Read more about the types of Fixed Rate Mortgages we offer.

Second Mortgages:

If you own property or a home, you may want to take advantage of the equity that has accumulated. Equity in a home is the difference between what the fair market value of your home is minus the amount you still owe on your mortgage. Many people take out another loan against their home equity for a variety of financial reasons, including:

  • To pay off higher interest debts
  • To send the kids to college
  • To take a dream vacation
  • To invest in more property, be it a vacation home or as a source of income

As with all the other types of mortgages available to you through us, there is more than one type of second mortgage you can choose from.

Home Equity Credit Lines:

These loans are also called HELOCs (pronounced: hee-lox) by bankers and brokers. Many of these programs offer the same convenience as having a credit card with the benefit of a lower interest rate than is typically available with credit accounts offered through banks. To qualify for this type of a loan, you put your house up as collateral. Your lender then reviews your application, taking in to account your credit history and remaining balance on your primary mortgage, to determine how much they will offer you for a line of credit and at what interest rate. Because you use your home or property as collateral to qualify, failing to pay on time has stiffer and more immediate consequences if you sign up for a HELOC.

Most HELOCs provide you with a credit card or a check book or both to allow you ready access to the full line of credit once you have been approved. Terms vary depending on the specific program, of course. As long as you make your payments on time and keep an eye on how much of your HELOC you have borrowed, having such funds available can make dealing with unexpected expenses easier.

Second Mortgages:

A second mortgage has much in common with both a primary mortgage and a HELOC. Like your primary mortgage, many loan programs are available including both fixed and adjustable rate products. Individuals who explore second mortgages do so for similar financial reasons as those who look in to HELOCs.

Because a second mortgage provides a single large payment to you or the parties you designate during the loan process, funds from these notes tend to go towards a specific known or anticipated debt. Many use a second mortgage to cover costs of remodeling, paying off high interest accounts, or to make investments in projected to earn a higher interest rate than that associated with the loan. Payment periods on second mortgages tend to be a shorter than for primary mortgages but will fluctuate based only on the terms of the note. (Remember, with a HELOC, your monthly payment changes each time to use the line of credit to pay for something.)

HELOCs and second mortgages can be a great way to increase your quality of life by accessing the value of your home without selling it. Contact us if you want to hear more about our current home equity offerings.