What is a Fixed-Rate Mortgage?
Fixed-rate mortgages are probably the most common type of mortgage. You are able to lock into a set interest rate which results in monthly mortgage payments that remain the same for the entire life of the loan. A fixed-rate mortgage (FRM) is a type of mortgage with a specific rate term. A fixed-rate mortgage has a fixed interest rate for the entire length of the mortgage term. These mortgages are typically available in 5 year increments between 10 and 30 year terms. The 30-year fixed rate mortgage is the most common type of mortgage people take out.
Advantages to Fixed-Rate Mortgages
Having a Fixed-Rate Mortgage helps most individuals establish their long term financial budgeting and savings goals more effectively. By having a mortgage rate that’s fixed for the duration of the loan, borrowers can typically project their overall household expenses more consistently from month to month.
Why a Jumbo Mortgage?
If you’re looking to buy an expensive home and need a large loan amount, a Jumbo Mortgage could be the right option for you. Jumbo Mortgages exceed the conforming limit on loans set by Fannie Mae and Freddie Mac.
What are Conforming Limits?
In most states, the conforming limit is around $453,100, but varies by location. Other areas that are specified to have a higher cost of living have a higher conforming limit of about $679,650. If you are looking to purchase a home and would like a loan amount greater than the conforming limit for your area, it’s likely that you will want to apply for a Jumbo Mortgage.
Will I Have Mortgage Insurance?
There is no private mortgage insurance (PMI) with a Jumbo Mortgage. To qualify, requirements for the borrower will be different compared to requirements of other loan types. Usually Jumbo Mortgages require a lower debt-to-income ratio, a higher credit score, and a more substantial down payment.
About Home Loans
VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of their mission to serve you, VA provides a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.
Eligibility Requirements
Your length of service or service commitment, duty status and character of service determine your eligibility for specific home loan benefits. VA-guaranteed loans are available for homes for your occupancy or a spouse and/or dependent (for active duty service members). To be eligible, you must have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).
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