If you are looking for home financing options in Springfield, you have several to choose from. Whether you are buying a home, refinancing, or considering a home equity loan, there are different types of loans available to you, and there are good reasons for choosing each one.
Fixed Rate Home Loans
Fixed rate home loans are available for first mortgages, refinancing, and home equity loans. A fixed rate home loan has the same interest rate over the life of the loan, and your payment is the same every month.
Fixed rate loans are good when interest rates are low or when they are expected to rise. The downside of a fixed rate home loan is that you can get stuck with a higher interest rate when rates are falling. You could, of course, refinance each time the rates decrease, but it costs you money every time you refinance and you could have to pay penalties on top of the loan costs.
Adjustable rate mortgages
Adjustable rate mortgages (ARM) adjust periodically to reflect current market rates. Your interest rate adjusts at specified intervals in accordance with the prime lending rate. If the prime goes up, so does your interest rate and house payment.
The advantage of ARMs is that your interest rate can decrease, too, and save you money. ARMs are a good option when you think interest rates will decrease. There is some risk involved, and your house payments change every time your mortgage adjusts. If you need stability in your monthly payments then this is not the mortgage for you, and you should look more closely at a fixed rate home loan.
Hybrids
Hybrid loans are a combination of two loans, a fixed rate loan and an ARM loan. Currently, most hybrid loans offer a low interest in the form of a fixed rate loan for the first period of the loan, usually five to ten years. After that time, the loan usually converts to an adjustable rate mortgage.
Hybrid loans allow people to buy the house of their dreams now while interest rates are good and before home prices get any higher. If your income is likely to increase over the next few years, a hybrid loan may be a great option for you.
If you are looking for a home loan in Springfield, Ohio, we can help you find a lender. Simply fill out the form at the bottom of this page, and one of our agents will contact you.
