Fixed & Adjustable Rate Mortgages

Overview

A conventional mortgage is a loan that is not insured by a government agency and generally follows the guidelines of Fannie Mae and Freddie Mac. It is the most common type of home loan for buyers with steady income and good credit, and it can be used for a primary residence, a second home, or an investment property.

Fixed rate vs. adjustable rate

A fixed rate mortgage keeps the same interest rate and principal and interest payment for the entire term, commonly 15, 20, or 30 years. It is the right choice when you want a predictable payment that never changes.

An adjustable rate mortgage (ARM) starts with a lower fixed rate for an introductory period, for example five or seven years, and then adjusts periodically based on market rates. It can make sense if you expect to move, refinance, or pay off the loan before the fixed period ends.

Key features

• Down payments as low as 3% for qualified first time buyers.
• Option to avoid monthly private mortgage insurance (PMI) with 20% down.
• Competitive rates for borrowers with strong credit.
• Terms available from 10 to 30 years.
• Eligible for primary residences, second homes, and investment properties.

Who it is for

Buyers with reliable income, a reasonable debt load, and good credit who want flexible terms and the option to put down more to lower their long term cost.

What you will typically need

• Recent pay stubs, W2s or 1099s, and tax returns.
• Bank and asset statements.
• Photo identification and Social Security number.
• Details on the property you want to buy or refinance.

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