Fixed Interest Rate Loan

Over the life of the loan, a fixed interest rate mortgage retains the same interest rate and principal payments. This means that the principal and interest portion of your monthly mortgage payment will stay the same. Since fixed interest rate loans offer more stability, a fixed rate loan may have a higher interest rate than an adjustable rate loan. If you are looking to take out a loan which will be less than $417,000, a conforming loan will most likely be right for you. If you are looking to take out a loan which will be more than $417,000, a Jumbo Loan will most likely be right for you.

The following requirements may apply:

• You have consistent and dependable income
• You are comfortable with a slightly higher interest rate giving the you a fixed monthly payment
• You are planning on staying in your new home longer than seven (7) years

Adjustable/Variable Interest Rate Loan

Adjustable rate loans have interest rates that remain fixed for a set period of time, after which they adjust periodically. These adjustments depend on the market conditions and the interest rate index to which the loan is linked. In exchange for an initial low payment and monthly payments that will change periodically thereafter , you'll enjoy a slightly lower interest rate and monthly payment at the start, compared to a fixed rate loan. If you are looking to take out a loan which will be less than $417,000, a Conforming Loan will most likely be right for you. If you are looking to take out a loan which will be more than $417,000, a Jumbo Loan will most likely be right for you.

The following requirements may apply:

• You're comfortable with an initial low payment and monthly payments that will change periodically thereafter
• You are looking to get into your home with the lowest initial rate and payment possible
• You expect to sell your home within 3, 5, or 7 years depending on the ARM program that you choose

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