Fixed-rate mortgages protect you against rising rates.
With a conventional loan, the interest rate remains the same for the entire term of the loan. Plus, you have the flexibility of selecting a 10, 15, 20, 25 or 30-year term (depending on the loan type). The main difference is the lower term options have higher monthly payments, which also means you are building home equity faster. Keep in mind you can use equity as a down payment for a new home if you sell your existing home or take out equity with a cash-out refinance.
Fixed-Rate Mortgage Highlights:
If you plan on staying in your home for a longer time frame, a fixed-rate mortgage could be the right solution for you since this option features:
Consistent monthly payments and interest rates
Protection from rising interest rates
Mortgage tax interest deduction*
Different term length options
*This does not constitute tax advice. Please consult a tax advisor regarding your specific situation.
Conventional loans come in a variety of options and with excellent advantages for borrowers who have a strong down payment. Under a conventional loan, a borrower with 20% equity can eliminate mortgage insurance.
While FHA and other government loans can have certain property restrictions, a conventional loan can be used on nearly all property types.
How It Works:
Northpoint Mortgage offers a variety of home loans with fewer restrictions than government loans and the possibility of eliminating mortgage insurance.
Who It’s For:
Homebuyers who don’t want to add mortgage insurance to their payments.
Homebuyers shopping for properties commonly restricted by government loans.