Fixed-Rate Mortgages
 A fixed-rate mortgage means the interest rate and principal payments remain the same for the entire life of the loan. (Taxes, of course, may change.)
Types of Fixed-Rate Mortgages: Typical types of Fixed-Rate Mortgages include 30 year fixed, 20 year fixed and 15 year fixed. Generally the shorter the number of years, the lower the fixed interest rate will be.
Advantages: Consistent principal and interest payments make this loan stable your rate won't change, so you don't need to worry about market fluctuations. A good choice if you're likely to stay in this house for a long time.
Disadvantages: May cost you more - these loans are usually priced higher than an adjustable-rate mortgage. Keep in mind that, on average, most people move or refinance within seven years. If rates in the current market are high, you're likely to get a better price with an adjustable-rate loan.
Get more Information: You may request additional information on Fixed Rate and other types of mortgages by calling Century 21 Mortgage toll free at 1-888-479-9202. We're ready to serve you 7 days a week!
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Adjustable-Rate Mortgages
An adjustable-rate mortgage (ARM) means that the interest rate changes over the life of the loan - according to the terms specified in advance. With ARMs:
- The initial interest rate is usually lower than with a fixed-rate mortgage.
- The monthly repayment would also be lower.
- The interest rate may be adjusted (up or down) at predetermined times.
- The monthly payment will then increase or decrease.
- Most ARM programs do offer "rate cap" protection, which limits the amount the rate can be increased, both each year and over the life of the loan.
- All ARMs are amortized over 30 years.
Advantages: ARMs are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments. If interest rates go down, you'll enjoy lower payments. Usually an ARM is the best choice for homeowners who plan to relocate (for example, with their company or the military), or for those who are purchasing their first home and plan to be in the property only for three to five years. Remember that, on average, most people move or refinance within seven years.
Disadvantages: Your monthly payments can increase if interest rates go up. Keep in mind that ARMs are best for homeowners who aren't planning on staying with a property for a long period. If you're on a fixed income, an ARM (especially a short-term ARM) may not be your best choice.
Types of Adjustable-Rate Mortgages: Almost any combination of the number of years the original loan rate will remain fixed and how often the rate can be adjusted after the fixed rate period. An example is a 10/1 Adjustable-Rate Mortgage. The initial rate of the loan is fixed for the first ten years of repayment. After 10 years, the rate adjusts every year thereafter for the remaining life of the loan. The loan is amortized over 30 years, so you'll enjoy the stability of a 30 year mortgage at a lower price than a fixed-rate mortgage of the same term. But an ARM is likely not the best choice if you're planning on owning the same property for more than 10 years. Other typical ARMs are 7/1, 5/1and 3/1.
Get more Information: You may request additional information on Adjustable Rate and other types of mortgages by calling CENTURY 21 Mortgage toll free at 1-888-479-9202. We're ready to serve you 7 days a week!
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Balloon Mortgage Programs
With a balloon mortgage, you start by making payments as you would with a full-term, 30 year loan, but after a certain period the balance of the mortgage comes due. With a 7 Year Balloon mortgage your mortgage may be amortized over a 30 years period. At the end of a 7 year period, the remaining balance comes due - a balloon payment needs to be made. So with a 7 year balloon, you would make monthly payments for seven years that have been calculated based on a 30 year mortgage payment plan. At the end of those seven years, the remaining principal balance is due and payable in full.
Advantages:You'll get a lower price on the loan, which will increase your buying power - and remember that your payments will be calculated as if the term were 30 years. You'll also usually have a conditional right to refinance after seven years, though on average most owners will have already made a change. If you know you have a lump sum of money on the way (such as an inheritance, bonus, or dividend payment), if you expect to relocate in a short period of time, or if you simply think you'll be in a better position to refinance later, this may be a choice worth your consideration.
Disadvantages: If you plan on keeping this property for longer than seven years, a longer-term loan may be a stronger choice
Get more Information: You may request additional information on Balloon Mortgages and other types of mortgages by calling Century 21 Mortgage toll free at 1-888-479-9202. We're ready to serve you 7 days a week!
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