Conventional Mortgages

Fixed Rate Home Mortgages

Advantages of a fixed-rate mortgage:
•Stable, competitive rates keep payments predictable and affordable
•You can choose from a variety of repayment terms
•You have the option to pay off your mortgage sooner with bi-weekly payments, or make additional payments to principal at any time (additional payments will not change the amount of the payment due each month)
•There’s no penalty for paying off the fixed rate loan early

What you’ll need to consider:
•The interest rate you pay on a longer-term loan may be lower than on a shorter-term loan, but you pay more in interest over the life of the loan
•You can’t take advantage of rates that might decrease during the loan term unless you refinance
•The length of time you plan to stay in your home and the loan’s long-term impact on your budget

 

Adjustable Rate Mortgage

Advantages of an Ajustable Rate Mortgage (ARM):
•Initial interest rates are typically lower than fixed-rate mortgages, providing you with more cash on hand each month during the early term of the loan
•ARMs loans feature an initial fixed rate for a designated time period early in the loan’s life, and you then pay off the loan at an annually adjusted rate and payment for the remaining term
•You can choose from a variety of repayment terms
•You can reduce future monthly payments by making additional payments to principal just before rate adjustment dates (however, making additional payments to principal does not change your payment on a fixed-rate loan)

What you’ll need to consider:
•Monthly payments change over the life of the loan and may increase substantially
•Devon bank mortgage professionals can help you understand all possible outcomes of an ARM