First Bank of the Palm Beaches offers a variety of options for purchasing your home. A conversation or two can help you to figure out which option is the right one for you and your particular situation. Here are just some of the options that might be a good fit.
The 30-Year Fixed Rate Mortgage
The 30-Year fixed rate mortgage is likely the most popular product available in the marketplace today. Most borrowers naturally like the fact that they will always know what their loan payment will be, especially in low interest rate environments. However, the average length of time that a home owner stays in one place is seven years. A 30-Year fixed rate mortgage might be a good option for individuals and families above the average but it is likely a poor option for individuals and families below the average.
One important thing to know also is that 30-Year Fixed Rate Mortgages are almost always sold to an investor and end up being owned by Fannie Mae or Freddie Mac. Borrowers in this category will likely care more about the rate and term than about the institution that ultimately ends up servicing and owning the loan.
The 15-Year Fixed Rate Mortgage
With a smaller term of the mortgage comes a more attractive interest rate. The lower rate and the shorter term also equates to paying much less interest over the life of the loan. If cash flow and qualification is not an issue, the 15-Year Fixed Rate Mortgage usually makes very good financial sense. However, a 30-Year product can keep loan payments smaller and more manageable.
Adjustable Rate Mortgages (ARMs)
Some home owners are confident in the fact that their home purchase is a temporary situation. They know that they will be under the average of 7 years and want an attractive interest rate. Therefore they might choose to fix their rate for 3, 5 or 7 years as opposed to 30 and still have a 30 year amortization. This can lead to the lowest monthly mortgage payment possible for the short term. However if the home is still owned after the adjustment period, the payment amount can be variable and borrowers can find themselves paying more than they want if rates rise. ARMs are good products if used wisely.
ARMs might also be retained by your originating bank. There are many borrowers than want to know what bank they are dealing with now and will always deal with in the future. Knowing what bank you will have your mortgage owned and serviced by is usually possible with an ARM product.
Home Equity Lines of Credit
The most common way to get a second mortgage on a property is through a home equity line of credit. There are any number of reasons to have a home equity line of credit. The most likely reason is to improve your home in order to make it more livable and more valuable. First Bank of the Palm Beaches is ready and willing to help you improve your home to make it absolutely perfect.