First-Time Home Purchase: Mortgage Loans For You

If you're a first-time home buyer, it's time to think about how to purchase mortgage loans. There are 3 main types of mortgages available for homebuyers. Speak with a qualified lender to find out how to purchase mortgage loans and which loan type best fits your needs and your budget.

Fixed Rate Mortgage (FRM)

A Fixed Rate Mortgage has a set interest rate that stays the same for the entire loan term. In other words, your monthly payment will be the same every month for 'x' number of years. The typical loan term is 30-years; however, you can get a shorter or longer term. If you can get a low interest rate, or if you plan to stay in your new home for at least 10 years, a Fixed Rate Mortgage may be your best option.

Adjustable Rate Mortgage (ARM)

An Adjustable Rate Mortgage offers more interest rate flexibility (and risk) than a FRM. An ARM generally offers lower rates and shorter terms than a FMR. You should consider an ARM if you:

  • plan to move from your new home in less than 10 years
  • are comfortable with increased risk (since your interest rate could go up or down, depending on the market)

Interest Only Mortgage

An Interest Only Mortgage allows mortgage holders to only pay the interest on their loan. This is great for new home buyers who have limited monthly cash flow and need to start out with small payments. You can increase your monthly payments at any time to pay down the principal balance.